- The Aaron's Company ( NYSE: AAN ) stock recorded a solid gain on Tuesday after the company raised full-year guidance and posted 31.2% growth in third quarter's revenue following BrandsMart acquisition .
- Georgia-based lease-to-own firm said revenue reached $593.4M (+31.2% Y/Y) in Q3 2022, notching a beat from consensus estimate by $34.86M.
- Aaron’s Business revenues were $412.9M (-8.7% Y/Y) primarily due to a 7.7% decline in same store revenues driven by a lower same-store lease portfolio size during the quarter, lower lease renewal rates, fewer exercises of early purchase options, and lower retail sales, the report read.
- Lease portfolio size for the Aaron’s Business was $125.8M at quarter end, a decrease of 4.8%
- BrandsMart's, big box consumer electronics retailer that AAN acquired earlier this year, revenue stood at $183.3M with adjusted EBITDA of $6.6M.
- E-commerce revenue grew year-over-year by 11.1% at the Aaron's Business and by 18.0% at BrandsMart.
- The Aaron's Company adjusted EBITDA was $35.2M, a decrease of 34.3% from a year-ago quarter.
- Adjusted EBITDA margin contracted to 10.3% from 14.8% in Q3 2021.
- Non-GAAP EPS of -$0.31 missed by $0.42.
- The group's adjusted free cash flow was $50.1M, an increase of $40.6M.
- Raises FY 2022 Guidance: The Aaron's Company raised company's full-year revenue guidance to $2.23-$2.27B vs. consensus of $2.22B.
- BrandsMart revenue is now forecasted between $550-$565M vs. prior guidance range of $545-$565M. That turns down Bank of America Securities' downgrade rating citing an expectation of guidance cut in BrandsMart segment as "demand has significantly worsened since April."
- Aaron's Business revenue guidance sits at $1.68-$1.71B vs. prior outlook of $1.65-$1.71B.
- Adjusted EBITDA is estimated to range between $160-$170M (prior: $150-$170M).
- Capex anticipated between $105-$115M and adjusted free cash flow of $70-$75M for the full year.
- Non-GAAP EPS to range within $1.90-$2.05 vs. consensus of $1.82.
- AAN shares are up 27% on Tuesday to trade at $10.23.
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The Aaron's Company rallies after BrandsMart acquisition boosts annual guidance