Aaron's Q4 FY19 revenue grows to $1 billion

21 Feb '20

2 min read

Pic: Aaron's

Aaron's, a US based lease-to-own retailer, reported consolidated revenues increase to $1 billion in fourth quarter (Q4) FY19 compared to $993.2 million in same period prior year. The company attributed this performance to growth in revenues at Progressive and the revenue contribution from franchised locations acquired by the Aaron's Business in 2018.

The company reported a net loss of $107.1 million in Q4 that ended on December 31, 2019 compared to net earnings of $61.7 million in the prior year period.

In Q4 FY19, total revenues for the Aaron's business decreased 5.4 per cent to $435.0 million from $459.7 million in Q4 FY18. The decrease was reportedly due to the net reduction of 145 stores during 2019, the expected attrition of revenue from prior year store mergers and lower collections, partially offset by the positive contributions from 152 franchised locations acquired throughout 2018.

Same-store revenues grew 0.4 per cent in Q4 FY19. This growth was attributed to the favourable impact of improved sequential collections as well at the continuing increase in e-commerce recurring revenues written, which was up 35.3 per cent in the fourth quarter.

For the full year, same store revenues were flat. Customer count on a same-store basis was down 4.8 per cent during the Q4 FY19 compared to the same period in 2018. Company-operated Aaron's stores had 946,000 customers at December 31, 2019, an 8.9 per cent decrease from December 31, 2018.

Non-retail sales, which primarily consist of merchandise sales to the company's franchisees, decreased 30.8 per cent in Q4 FY19. The decline is attributable primarily to the franchisee acquisitions completed in 2018, as company reported.

The provision for lease merchandise write-offs was 7.3 per cent of revenues in Q4 FY19, compared with 5.1 per cent for the same period last year. Contributing to the increase in write-offs was the reduction in collection performance in Q3 that resulted from the implementation of our new sales programme, store closure activity during the first half of 2019, and an increasing mix of e-commerce as a percent of revenue, as company reported.

Till December 31, 2019, the Aaron's Business had 1,167 company-operated stores and 335 franchised stores.

Fibre2Fashion News Desk (JL)

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