What happened
Shares of Aaron's, Inc. (AAN), a lease-purchase retailer of furniture, consumer electronics, appliances, and household accessories, are trading 11% higher as of 10:50 a.m. EDT, after the company's second-quarter results topped estimates.
So what
Revenue jumped to $815.6 million, a comfortable increase from the prior year's $789.4 million, and well above analysts' estimates calling for $790.39 million. That top-line beat filtered down to the company's bottom line, with adjusted earnings increasing to $48.5 million, or $0.68 per share, which was well above consensus estimates calling for $0.58 per share.
"We're very pleased with our second quarter results," said CEO John Robinson in a press release. He continued:
Strong growth at Progressive Leasing and disciplined execution in the Aaron's Business drove increased revenues and improved profitability in the quarter. Progressive had an exceptional quarter driven by a significant increase in total invoice volume and strong lease portfolio performance. The business has impressive momentum across a diverse mix of verticals and we expect to continue to drive long-term growth with our leading virtual lease-to-own model.
Image source: Getty Images.
Now what
In addition to posting an earnings beat, Aaron's announced an acquisition of its largest franchisee in an all-cash transaction valued at about $140 million. The deal covers 104 Aaron's stores in 11 states, and management expects it to be accretive to 2017 earnings. It would also give the company an opportunity to enhance its supply chain synergies to help drive margins higher. All in all, it was a solid quarter from the retailer, but investors should take the share-price increase with a grain of salt because the stock has a history of volatility with earnings releases.
