Upcoming AWS Coverage on Air Lease Post-Earnings Results

LONDON, UK / ACCESSWIRE / May 11, 2017 / Active Wall St. announces its post-earnings coverage on Aaron's, Inc. (NYSE: AAN). The Company released its first quarter fiscal 2017 results on April 28, 2017. The leading omnichannel provider of lease-purchase solutions outperformed top- and bottom-line expectations. Register with us now for your free membership at:

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One of Aaron's' competitors within the Rental & Leasing Services space, Air Lease Corp. (NYSE: AL), released its financial results for Q12017 on May 04, 2017. AWS will be initiating a research report on Air Lease in the coming days.

Today, AWS is promoting its earnings coverage on AAN; touching on AL. Get our free coverage by signing up to:

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Earnings Reviewed

For the quarter ended March 31, 2017, Aaron's revenues were $844.6 million compared with $854.4 million for Q1 2016. The Company's sales numbers surpassed analysts' consensus of $833.3 million

Aaron's consolidated lease revenues and fees for Q1 2017 increased 0.3% on a y-o-y basis, while Franchise royalties and fees decreased 12.9% in the reported quarter compared with the year ago same period. Aaron's franchisee revenues totaled $230.4 million in Q1 2017, a decrease of 7.8% on a y-o-y basis. Same store revenues for franchised stores were down 4.9% and same store customer counts were down 4.1% for the reported quarter. Franchised stores had 520,000 customers at the end of Q1 2017, a 7.5% decline from the prior year comparable period.

Adjusted EBITDA for Aaron's, which excludes the charges and adjustments mentioned above, was $109.4 million for Q1 2017 compared with $104.0 million for Q1 2016.

For Q1 2017, Aaron's net earnings increased to $53.3 million compared with $49.7 million in the prior year's same period. The Company's diluted earnings per share increased to $0.74 compared with $0.68 per share in the year ago corresponding period. On a non-GAAP basis, Aaron's net earnings for Q1 2017 increased to $57.8 million compared with $52.1 million for Q1 2016, and earnings per share assuming dilution were $0.80 in the reported quarter compared with $0.71 for the prior year's same quarter. The Company's earnings numbers exceeded Wall Street's estimates of $0.66 per share.

Segment Results

For Q1 2017, total revenues for the Aaron's Business decreased 13.4% to $470.2 million from $543.0 million in Q1 2016. The segment's Lease revenue and fees for the three months ended March 31, 2017, decreased 13.2% compared with the same period in 2016. Non-retail sales, which primarily consist of merchandise sales to the Company's franchisees, decreased 12.6% on a y-o-y basis.

Earnings before income taxes for the Aaron's Business were $48.6 million for Q1 2017 compared with $60.7 million for Q1 2016. The segment's adjusted EBITDA was $61.2 million compared with $70.9 million for the same period a year ago. As a percentage of revenue, adjusted EBITDA was 13.0% for Q1 2017 compared with 13.1% for Q1 2016.

During Q1 2017, the segment's same store revenues decreased 9.3% on a y-o-y basis, and customer count on a same store basis was down 5.9%. Company-operated Aaron's stores had 937,000 customers at March 31, 2017, a 6.7% decrease from Q1 2016. At March 31, 2017, Aaron's Business had 1,155 Company-operated stores and 688 franchised stores. During the reported quarter, one Company-operated store and nine franchised stores were consolidated or closed, while nine Company-operated stores were sold to a third party. The Company identified approximately 70 additional stores to be closed in Q2 2017. The Company continues to expect it will incur an aggregate pre-tax charge of approximately $13 million in FY17 with respect to the stores that have been identified for closure.

For Q1 2017, Aaron's Progressive Leasing segment revenue surged 19.4% to $366.1 million from $306.7 million in Q1 2016. Active doors increased 38% in the reported quarter to approximately 18,600. Progressive Leasing had 604,000 customers at March 31, 2017, a 19% increase from March 31, 2016.

Earnings before income taxes for Progressive Leasing were $35.8 million for Q1 2017 compared with $21.9 million in Q1 2016. The segment's EBITDA for the reported quarter was $48.5 million compared with $34.8 million for the year earlier same quarter. As a percentage of revenue, EBITDA was 13.2% for Q1 2017 compared with 11.3% for Q1 2016. The segment's Write offs for damaged, lost or unsaleable merchandise were 4.8% of revenue in the reported quarter compared with 6.2% in the year earlier corresponding quarter.

For Q1 2017, Aaron's DAMI segment reported revenue of $8.2 million compared with $4.8 million in Q1 2016. DAMI's loss before income taxes was $1.8 million for the reported quarter compared with a loss before income taxes of $2.9 million in the prior year's same quarter.

Cash Flow

Aaron's generated $104.2 million in cash from operations during Q1 2017 and ended the first quarter with $348.5 million in cash compared with $308.6 million at the end of 2016. The Company repurchased 1,208,466 shares of its common stock during the reported quarter of 2017, and has authorization to purchase an additional 7,915,255 shares.

Stock Performance

On Wednesday, May 10, 2017, the stock closed the trading session at $36.25, slightly up 0.17% from its previous closing price of $36.19. A total volume of 612.01 thousand shares have exchanged hands. Aaron's stock price surged 18.74% in the last month, 22.05% in the past three months, and 39.37% in the previous six months. Moreover, the stock gained 13.32% since the start of the year. The Company's shares are trading at a PE ratio of 18.47 and have a dividend yield of 0.30%. At Wednesday's closing price, the stock's net capitalization stands at $2.65 billion.

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SOURCE: Active Wall Street