Aaron's Net Falls 56 Percent in Q3
October 24, 2014,
ATLANTA-Declining margins and rising costs, offsetting a major gain in revenues, drove a 56 percent drop in Aaron's (NYSE: AAN) third-quarter net income, to $9.3 million.
Operating expenses in the quarter, which ended on Sept. 30, jumped 28.7 percent in dollars, although as a percentage of revenues expenses were down 109 basis points to 47.3 percent. Gross margin fell 361 basis points to 52.3 percent.
Total revenues in the quarter were $707.6 million, gaining 31.7 percent. The top-line total included $189.8 million in revenues from Progressive, the provider of virtual lease-to-own programs that Aaron's acquired in April. Same-store revenues fell 2.8 percent and customer count on a same-store basis was off 3.9 percent.
Looking ahead, Aaron's said it expects fourth-quarter revenues to reach about $740 million, including revenues of an estimated $205 million from Progressive. Revenues for the full fiscal year are projected to total about $2.71 billion, which are expected to include about $534 million from Progressive.