We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Strength in Online & GenNext Stores to Aid Aaron's (AAN)
Read MoreHide Full Article
The Aaron's Company, Inc. (AAN - Free Report) has been gaining from strength in the direct-to-consumer lease-to-own market, backed by a robust lease portfolio. Solid online show and sturdy performance in GenNext stores also bode well. Driven by these factors, management posted impressive third-quarter 2021 results, wherein the top and bottom lines beat the Zacks Consensus Estimate.
In the quarter, consolidated revenues rose 2.5% year over year, while same-store revenues rose 4.6%. This marked the sixth successive quarter of same-store sales growth. As a result, management raised its 2021 view. For 2021, the company anticipates revenues of $1.82-$1.83 billion, up from the earlier mentioned $1.775-$1.8 billion. Same-store revenues are forecast to grow 7.5-8.5% compared with 6-8% growth stated previously.
The company has been witnessing strength in its e-commerce platform, even after stores reopened. In third-quarter 2021, e-commerce lease revenues were up 13.3%, accounting for 14.3% of total revenues. The uptick can be attributable to increased investments in digital marketing, improved shopping experience, same-day and next-day delivery facilities, personalization of products, and a broader assortment, including the latest product categories. Aaron’s express delivery program also bodes well.
Similarly, other stocks in the Consumer Discretionary space have been experiencing robust digital sales. Crocs’ (CROX - Free Report) digital sales advanced 68.9% and accounted for 36.8% of revenues in the third quarter of 2021. The metric also surged 129% from third-quarter 2019. lululemon’s (LULU - Free Report) revenues in the digital channel increased 21% year over year and 54% on a two-year CAGR basis in third-quarter fiscal 2021. PVH Corp’s (PVH - Free Report) revenues in the digital channel rose 15% year over year in third-quarter fiscal 2021, accounting for nearly 21% of total revenues.
Coming to Aaron’s, it launched its 100th store in Largo, FL, as part of its GenNext real estate strategy. The GenNext concept stores come with easier-to-navigate main showrooms, offering new furniture, appliances and electronics. The company has already been receiving positive feedback for its other GenNext locations, with collective sales growth of 20% outpacing sales in traditional stores.
However, AAN is reeling under continued sluggishness in franchisee revenues due to reduced franchised locations. Lower customer payment activity due to reduced government stimulus also remains concerning. Management expects customer payment activity to decline further in the near term. Although fourth-quarter 2021 customer lease payment activity is likely to remain above the pre-pandemic level, it is anticipated to decline year over year.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Strength in Online & GenNext Stores to Aid Aaron's (AAN)
The Aaron's Company, Inc. (AAN - Free Report) has been gaining from strength in the direct-to-consumer lease-to-own market, backed by a robust lease portfolio. Solid online show and sturdy performance in GenNext stores also bode well. Driven by these factors, management posted impressive third-quarter 2021 results, wherein the top and bottom lines beat the Zacks Consensus Estimate.
In the quarter, consolidated revenues rose 2.5% year over year, while same-store revenues rose 4.6%. This marked the sixth successive quarter of same-store sales growth. As a result, management raised its 2021 view. For 2021, the company anticipates revenues of $1.82-$1.83 billion, up from the earlier mentioned $1.775-$1.8 billion. Same-store revenues are forecast to grow 7.5-8.5% compared with 6-8% growth stated previously.
The company has been witnessing strength in its e-commerce platform, even after stores reopened. In third-quarter 2021, e-commerce lease revenues were up 13.3%, accounting for 14.3% of total revenues. The uptick can be attributable to increased investments in digital marketing, improved shopping experience, same-day and next-day delivery facilities, personalization of products, and a broader assortment, including the latest product categories. Aaron’s express delivery program also bodes well.
Similarly, other stocks in the Consumer Discretionary space have been experiencing robust digital sales. Crocs’ (CROX - Free Report) digital sales advanced 68.9% and accounted for 36.8% of revenues in the third quarter of 2021. The metric also surged 129% from third-quarter 2019. lululemon’s (LULU - Free Report) revenues in the digital channel increased 21% year over year and 54% on a two-year CAGR basis in third-quarter fiscal 2021. PVH Corp’s (PVH - Free Report) revenues in the digital channel rose 15% year over year in third-quarter fiscal 2021, accounting for nearly 21% of total revenues.
Coming to Aaron’s, it launched its 100th store in Largo, FL, as part of its GenNext real estate strategy. The GenNext concept stores come with easier-to-navigate main showrooms, offering new furniture, appliances and electronics. The company has already been receiving positive feedback for its other GenNext locations, with collective sales growth of 20% outpacing sales in traditional stores.
However, AAN is reeling under continued sluggishness in franchisee revenues due to reduced franchised locations. Lower customer payment activity due to reduced government stimulus also remains concerning. Management expects customer payment activity to decline further in the near term. Although fourth-quarter 2021 customer lease payment activity is likely to remain above the pre-pandemic level, it is anticipated to decline year over year.