Aaron's Inc. reported on Tuesday record revenue and profits for the second quarter, as more customers who can't buy outright the furniture and electronics they want turned to the rent-to-own retailer.
Atlanta-based Aaron's has turned a difficult operating environment for many retailers to an advantage.
"We believe tight consumer credit is actually positive for our business, however high unemployment is a negative," Ronald Allen, Aaron's President and CEO, told analysts on a conference call. Still, he said "demand remains strong" for the company's line of furniture and electronics.
Same store revenue, a key metric of health from stores open at least a year, climbed 6.1 percent for corporate-owned locations and 7 percent for franchise-owned outlets over second quarter 2011. Customers of Aaron's and its franchise store owners grew 14.2 percent, the company said.
Overall revenue increased 12 percent in second quarter to $539.5 million. Net income was $36.3 million, or 47 cents per share, compared to $10.8 million, or 13 cents per share in second quarter last year. The results in second quarter 2011 included a charge related to an employee lawsuit that later was settled with most of that returning as income.
Aaron's said its new HomeSmart division, a rent-to-own seller with weekly payment plans, is not yet profitable, but executives expects it to be by the end of the year. Aaron's has high hopes for the chain's growth.
Also Tuesday, Aaron's projected corporate and franchise new store growth of 5 percent to 7 percent over the count of stress at the end of 2011.
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