More customers are using rent-to-own furniture store Aaron's to get the beds, couches and televisions they can't afford to buy outright, executives at the Atlanta company said Friday.
The number of Aaron's customers rose 14 percent for the first three months of 2012, as compared to the same period in 2011. In part, that may be due to increased advertising, Aaron's executive vice president and chief financial officer Gilbert Danielson said.
While Danielson said business will improve as the unemployment rate falls, and the lower-wage workers that are Aaron's primary customers have more money to spend, he was unable to say if an improving economy was behind the growth at all.
Still, Danielson said, Aaron's customers continue to have difficulty accessing credit and are turning to the store to get furniture they are unable to pay for on their own. In a company conference call, Aaron's president and CEO Ronald Allen said he expects business to continue improving.
Aaron's did better than expected for the first part of the year, and raised its expectations for the remainder of 2012.
The company said it would be slowing the growth of HomeSmart, its weekly rent-to-own model, to better evaluate the prospects of the new business and figure out how to make it profitable. Aaron's will also focus on improving management recruiting, training and retention.
The company made $71.2 million in the first quarter, a 60 percent increase over the $44.4 million Aaron's made in the first quarter a year ago. Aaron's expenses were reduced by $35.5 million because of the settlement of a sexual harassment lawsuit earlier this year that the company had already taken a charge on. Without that reversal, the company would have made $49.2 million, a 10.8 percent increase over 2011.
Aaron's stock rose $1.53 Friday, or 5.8 percent.
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