Rent-to-own home goods specialist Aaron's (AAN +0.00%) did not exactly have a top Tuesday on the equities market. The company's stock closed the day almost 19% lower in price "thanks" to a quarterly-earnings report that did not meet expectations either for trailing fundamentals or guidance. Meanwhile, the S&P 500 index managed to defy gravity slightly, rising by just under 0.2%.
Declines and losses in the fourth quarter
After market hours on Monday, Aaron's took the wraps off its fourth quarter and full-year 2023 figures. For the former period, revenue came in at $529.5 million, representing a year-over-year decline of slightly more than 10%. More discouragingly, on the bottom line the company flipped to a non-GAAP (adjusted) net loss. This amounted to nearly $7.8 million ($0.26 per share) against a profit of $2.8 million in the year-ago quarter.
Analysts tracking Aaron's stock were expecting better. On average, their estimate for revenue was a bit more than $542 million, while they believed the non-GAAP bottom line would show a profit of $0.03 per share.
In the earnings release, the company attributed its weaker-than-anticipated performance to continued pressure in its key product categories.
NYSE: AAN
Key Data Points
Guidance fell short too
Aaron's proffered guidance for the entirety of 2024 and the relatively modest numbers compounded the disappointment investors felt about the company.
It's forecasting revenue of $2.055 billion to $2.155 billion for the year, which at the high end would mean less than 1% growth over the 2023 result. Adjusted earnings per share are expected to be anywhere from a loss of $0.10 to a profit of $0.25; that number for this past year was $0.81.
On top of that, those ranges were also well under the consensus-analyst projections. These called for revenue of $2.2 billion and per-share adjusted net income of $1.09.
