Why Aaron's, Inc. Stock Dropped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Aaron's (NYSE: AAN  ) finished down 10% after the lease-to-own retailer lowered its second-quarter guidance.

So what: Aaron's lowered its revenue guidance slightly, from $675 million to $672 million, but noted strong growth in its recently acquired Progressive finance business. However, the core business suffered, causing adjusted EPS guidance to be reduced from a range of $0.43 to $0.48 to a new range of $0.34 to $0.37. Management didn't provide details on the weak core retail performance but instead touted the strong growth in Progressive and said it will close 44 underperforming stores by the end of the third quarter, as part of its store rationalization strategy.

Now what: Analysts had expected earnings per share of $0.46 for the second quarter, so it's easy to see why the stock sold off today. Other retailers, especially home-focused ones, have given weak preliminary reports, so perhaps it's not surprising to see weak numbers from Aaron's. Management cited a challenging economic environment, as we've heard from retailers over the past two quarters, and it's difficult to predict when that, or the perception of it, will end. Aaron's is expected to report earnings next week.

Your credit card may soon be completely worthless
The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3030418, ~/Articles/ArticleHandler.aspx, 9/2/2014 10:14:15 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement