Aaron's continues profitable streak

By Rachel Tobin Ramos

The Atlanta Journal-Constitution

Lease-to-own retailer Aaron’s Inc. said Wednesday that third quarter revenues rose 7 percent to $415.3 million.

The results are more evidence the Atlanta-based chain appeals to consumers during an economic downturn.

But in a conference call, Robin Loudermilk Jr., president and CEO, worried the company would get known for that and emphasized Aaron's also does fine better economic times.

"Any concerns our business may turn as the economy gets better I do not believe are well-founded,"  he said. "I think we'll continue to do well."

At Aaron's stores, consumers don't need credit to purchase TVs, sofas or other household items, though purchase prices may be higher than at other retail outlets.

A failure to pay can result in repossession. If customers pay on time and in full, they own the items. Many items can be purchased for $99 a month.

Aaron's third quarter profit rose 24 percent to $24.7 million, for earnings per share of 45 cents. That's compared to $19.8 million in profit, or 37 cents per share, for the third quarter last year.

Still, not all of Aaron's businesses are recessionary proof: the company wrote-off $2.2 million in its office furniture division, Loudermilk said.

The division hasn't been profitable for many quarters, he said. The company sold off a big percentage of its "rent-to-rent" business earlier, he said, and is revamping its remaining 12 stores.

At Aaron's consumer stores, same-store sales (a key statistic about stores open more than a year) were up 6.3 percent in the third quarter, with customer counts rising 16 percent.

Aaron's forecast that annual revenues would be $1.74 billion, with profits ranging from $2.01 to $2.06 per share. Aaron's has more than 1,655 stores in 48 states and Canada.