Aaron’s Q3 profit tumbles 56%

Lease-to-own retailer Aaron’s reported a 56-percent decrease in third quarter profit, citing costs related to recent restructurings and the acquisition of Progressive Finance Holdings, which offset a 31.7-percent gain in revenue for the Sept. 30-ended period. Aaron’s recorded a net income of $9.3 million, or 13 cents per diluted share, compared with $21.1 million, or 28 cents per diluted share, a year earlier. Revenue climbed to $707.6 million, compared with $537.2 million in the third quarter of 2013. The increase resulted from $189.8 million in new revenue contributed by Progressive, offset by lower sales from Aaron’s core business. Sales from Aaron’s sales and lease ownership division fell 3 percent to $501.7 million, compared with $516.1 million a year earlier. Franchise royalties decreased 4 percent during the period, reflecting same-store declines of 2.5 percent for revenue and 4.1 percent for traffic at franchised locations. During the period, Aaron’s recorded a $6.9 million restructuring charge related to the closure of 44 company-owned stores. Other expenses included $9.1 million of retirement costs related to the brand’s former chief executive and chief operating officer, as well as several charges for the Progressive acquisition. “We are making significant progress on the strategic initiatives outlined earlier this year to strengthen our core business,” Gilbert Danielson, interim CEO and CFO, said in a statement. “Improving the customer’s experience is a priority, and through meeting their needs in all areas of our operations, including e-commerce and the personal relationship at Aaron’s stores, we believe our overall customer reach will expand.”