Why Aaron’s (AAN Stock Falls After Hours)
- Aaron’s Company Inc NAA reported second-quarter revenue growth of 30.6% year-over-year to $610.4 million, beating consensus of $607.87 million.
- Adjusted EPS was $0.79, beating the consensus of $0.62.
- Same-store revenue was down 6.7% year-on-year, due to lower lease renewals, less exercise of early purchase options and lower sales at detail.
- Gross profit margin fell 1,500 basis points to 48%.
- The company recorded an operating loss of ($9.46 million), compared to a profit of $44.05 million in 2Q21.
- Aaron’s cash provided by operating activities year-to-date was $57.08 million, compared to $60.16 million a year ago.
- Adjusted EBITDA decreased to $48.1 million (-26.4% year-over-year) and margin decreased 610 basis points to 7.9%.
- The company repurchased 254,216 shares for approximately $5.3 million during the quarter. The remaining authorized share repurchase amount was $135.8 million as of June 30, 2022.
- “In Aaron’s business, customer demand and payment activity gradually deteriorated during the quarter as high inflation impacted low-income consumers. In response to these challenging market conditions , we are leveraging our centralized rental decision and digital services platforms to maintain our customer relationships and strengthen cost control actions,” said Douglas Lindsay, Managing Director.
- Outlook for FY22: Aaron forecasts total revenue of $2.19-2.27 billion (before $2.32-2.39 billion), adjusted EBITDA of $150.0-170.0 million (before $200-215 million). of dollars).
- He expects adjusted EPS of $1.75 to $2.15 (before $2.65 to $2.90); and Free Cash Flow of $50-60 million (before $45-55 million).
- Price Action: AAN shares are trading down 29.03% to $11 in Monday’s aftermarket session.
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