Rent-to-own News - Aaron's reports record Q4 results

Aaron’s today announced record results for the three months and year ended December 31, 2010.

For the fourth quarter of 2010, revenues increased 9% to $484.4 million compared to $446.3 million for the fourth quarter in 2009.  Net earnings increased 23% to $30.8 million versus $25.0 million last year.  Diluted earnings per share were $.38 compared to $.31 per share a year ago, also a 23% increase.

For the year ended December 31, 2010, revenues increased 7% to $1.877 billion compared to $1.753 billion for 2009.  Net earnings increased 5% to $118.4 million versus $112.6 million a year ago.  Diluted earnings per share were up 5% to $1.44 for 2010 compared to $1.37 in 2009.

“Our results for the fourth quarter exceeded our guidance, with better than expected same store revenue growth and profitability,” said Robert C. Loudermilk, Jr., President and Chief Executive Officer of Aaron’s.  “Although current business challenges and conditions affect us as they do other retailers, through the years the strength of the Aaron’s business model has been proven resilient and has delivered consistent and superior financial results.  Aaron’s provides desired and needed basic home furnishings, and our customers’ demand for these products continues to remain strong."

Same store revenues (revenues earned in Company-operated stores open for the entirety of both periods) increased 6.2% during the fourth quarter of 2010 compared to the fourth quarter of 2009.  Same store revenues also increased 4.4% for Company-operated stores open for over two years at the end of December 2010.

The Company had 912,000 customers and its franchisees had 502,000 customers at the end of the year, a 10% increase in total customers over the number at the end of 2009 (customers of our franchisees, however, are not customers of Aaron’s, Inc).  The customer count on a same store basis for Company-operated stores was up 7.2% in the fourth quarter compared to the same quarter last year.

The Company began ceasing the operations of its Aaron’s Office Furniture division in June of 2010.  During the fourth quarter, the Company closed one additional Aaron’s Office Furniture store and currently has one store that is anticipated to remain open in 2011 to liquidate merchandise.  The fourth quarter 2010 financial results include pre-tax charges to operating expenses of $893,000 and the annual results include pre-tax operating expenses of $9.0 million, or $.07 per diluted share after tax, related to the closing of this division.  

The Company reacquired 1,478,805 shares of Common Stock in 2010 including 1,000,000 shares during the fourth quarter, and has the Board of Director’s current authorization to purchase an additional 4,401,815 shares of Common Stock.

In the fourth quarter of 2010 the Company converted its non-voting Common Stock into voting Class A Common Stock on a one-for-one basis.  The conversion was approved by a majority of the holders of both the Company’s Common Stock and Class A Common Stock, each voting as a separate class.  As a result of the conversion, all shares of the Company's Common Stock were converted into shares of Class A Common Stock, and the Class A Common Stock was renamed as the Company’s “Common Stock.”

Full release, go here.