‘Recession-proof’ Aaron Rents beats estimates

Atlanta-based Aaron Rents, which has 1,585 rent-to-own stores nationwide, beat Wall Street estimates by 4 cents per share in third quarter earnings.

The numbers: Third-quarter net profit rose 32 percent to $21.1 million, or 39 cents per share.

Revenue rose 16 percent to $388 million during the third quarter.

The reasons: Revenue poured into the company that says it is “recession proof” because its customers — typically those with bad credit — are almost always living in a recession. Same-store sales rose 5.7 percent in the third quarter, which led to increased royalties from franchisees. Aaron’s also earned cash by selling assets. The sell-off included a parking deck in Buckhead ($4.9 million); its corporate furnishings division to CORT ($72 million); and 11 company-owned stores ($2.6 million).

The company would have performed even better without hurricanes that disrupted business in the southern and central United States. President and CEO Robin Loudermilk Jr. said hurricanes had a negative impact of 1 to 2 cents per share.

“We still managed to have an outstanding quarter as customers continue to come into our stores seeking basic home furnishings,” he said in a statement.

The future: Aaron’s sold 46 area development agreements and rights to open 125 new stores during the quarter. In the first nine months of the year, Aaron’s had awarded rights to open 303 stores over the next several years.

Aaron’s expects its 2008 earnings to range from $1.60 to $1.65 per share.