Rent-to-own giant Aaron’s continues to struggle with its core business, despite a stronger overall second quarter earnings performance.
Same-store revenue and foot traffic at company-owned stores fell 3.9 percent and 3.7 percent, respectively, as Aaron’s customers, pinched by the economy even as it recovers, are not spending.
Neil Saunders, CEO of retail research firm Conlumino, said, “The continued softness in the core business is disappointing given that Aaron’s has now suffered a fairly long run period of decline and, on the way, has tried to take steps to remedy the situation.
“This includes improving store layouts and customer service, as well as making marketing campaigns more effective. These initiatives do not appear, as of yet, to be bearing much fruit.”
Aaron’s profit, however, jumped from $8.5 million in the second quarter of 2014 to $40.5 million during the same period this year — mostly on of the health of its Progressive Finance division.
Progressive, which Aaron’s bought in April 2014, had $255.9 million in revenue in the second quarter of 2015 and $507.6 million for the first six months of this year. Overall Aaron’s revenue ticked up more than 16 percent to $769 million.
“We’re disappointed that core revenues were not stronger in the quarter but remain optimistic that recent initiatives will drive better year-over-year comps in the future,” Aaron’s CEO John Robinson said in a statement.
Robinson was installed in November 2014 to succeed former CEO Ron Allen, a one-time Delta Air Lines CEO who’d been been Aaron’s top executive since February 2012.
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