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Continued Soft Demand Trends to Mar Aaron's (AAN) Q4 Earnings
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The Aaron's Company, Inc. (AAN - Free Report) is scheduled to report fourth-quarter 2023 results on Feb 26. This lease-to-own provider is likely to witness declines in the top and bottom lines when it reports quarterly results.
The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 3 cents per share, which indicates a sharp decline of 66.7% from the year-ago quarter’s reported figure. The consensus mark has been unchanged in the past 30 days. The consensus mark for revenues is pegged at $542.9 million, indicating a decline of 7.9% from the figure reported in the year-ago quarter.
The Zacks Consensus Estimate for AAN’s 2023 revenues is pegged at $2.15 billion, indicating a decline of 4.3% from the figure reported in the year-ago quarter. The consensus mark for earnings is pegged at $1.09 per share, which suggests a drop of 47.3% from the year-ago quarter’s reported figure. The consensus mark has been unchanged in the past 30 days.
In the last reported quarter, the company posted a negative earnings surprise of 83.3%. It delivered an earnings beat of 179.8%, on average, in the trailing four quarters.
Aaron’s has been witnessing weak lease revenues and fees, and drab retail sales at the Aaron's and BrandsMart businesses. These are likely to have dented the company’s top-line performance in the to-be-reported quarter. The Aaron’s Business segment has been witnessing lesser lease portfolio size and lease renewal rate, coupled with fewer exercises of early purchase options and weak retail sales.
The company has been impacted by changing market dynamics. Sluggish demand for discretionary products due to the impacts of lower income on customers has been mainly hurting retail sales trends, which is likely to have continued in the fourth quarter.
On the last reported quarter’s earnings call, management expected the challenging demand trends to persist in the fourth quarter of 2023 and in 2024. Consequently, management anticipated 2023 revenues to be $2.12-$2.17 billion. For the Aaron’s business, the company predicted revenues of $1.50-$1.54 billion. It anticipated revenues of $615-$630 million for BrandsMart.
Our model estimated lease revenues and fees to decline 2.5% and 7.1%, respectively, in the fourth quarter and 2023. We expect retail sales to be down 17.8% year over year in the fourth quarter and grow 4.7% in 2023.
Brand-wise, we expect revenues for the Aaron’s business to decline 11.2% year over year to $358.8 million in the fourth quarter and 9.8% to $1,536.1 million in 2023. For BrandsMart, revenues are expected to decline 1.3% to $185.2 million in the fourth quarter and increase 13.2% to $625.5 million in 2023.
However, Aaron’s has been advancing its business through the effective use of e-commerce platforms and the implementation of its GenNext strategy. The company has been witnessing strength in its e-commerce platform, driven by flexible payment options, low prices and a wider variety of products.
Some other notable efforts include increased investments in digital marketing, improved shopping experience, same-day and next-day delivery facilities, the personalization of products and a broader assortment, including the latest product categories. Aaron’s express delivery program bodes well. Gains from the e-commerce initiatives are expected to have cushioned the company’s top line in the fourth quarter.
Alongside these initiatives, the company has been focused on cost-reduction measures aimed at improving efficiency and strategic procurement. It is on track to achieve its cost-optimization goals by delivering $35-$40 million in savings in 2023. This underscores management's dedication to enhancing business efficiency. These cost-savings are likely to have aided margins in the to-be-reported quarter.
Zacks Model
Our proven model does not conclusively predict an earnings beat for Aaron's this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Aaron's has a Zacks Rank #5 (Strong Sell) and an Earnings ESP of 0.00%.
Stocks Poised to Beat Earnings Estimates
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
Netflix (NFLX - Free Report) has an Earnings ESP of +1.98% and currently sports a Zacks Rank #1. NFLX is likely to register top and bottom-line growth when it reports first-quarter 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $9.3 billion, suggesting 13.4% growth from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Netflix’s first-quarter earnings is pegged at $4.41 per share, suggesting 53.1% growth from the year-ago quarter’s actual. The consensus mark has moved up 10.3% in the past 30 days.
PVH Corporation (PVH - Free Report) has an Earnings ESP of +0.90% and a Zacks Rank #2 at present. PVH is likely to register bottom-line growth when it reports fourth-quarter fiscal 2023 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $2.4 billion, suggesting a 3.3% decline from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for PVH’s fiscal fourth-quarter earnings is pegged at $3.48 per share, suggesting year-over-year growth of 46.2%. The consensus mark has moved up by a penny in the past seven days.
Planet Fitness (PLNT - Free Report) currently has an Earnings ESP of +3.77% and a Zacks Rank #3. The company is likely to register top and bottom-line growth when it reports fourth-quarter 2023 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $282.3 million, suggesting 0.4% growth from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Planet Fitness’ fourth-quarter earnings is pegged at 58 cents, suggesting 9.4% growth from that reported in the year-ago quarter. The consensus mark has been unchanged in the past 30 days.
Image: Shutterstock
Continued Soft Demand Trends to Mar Aaron's (AAN) Q4 Earnings
The Aaron's Company, Inc. (AAN - Free Report) is scheduled to report fourth-quarter 2023 results on Feb 26. This lease-to-own provider is likely to witness declines in the top and bottom lines when it reports quarterly results.
The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 3 cents per share, which indicates a sharp decline of 66.7% from the year-ago quarter’s reported figure. The consensus mark has been unchanged in the past 30 days. The consensus mark for revenues is pegged at $542.9 million, indicating a decline of 7.9% from the figure reported in the year-ago quarter.
The Zacks Consensus Estimate for AAN’s 2023 revenues is pegged at $2.15 billion, indicating a decline of 4.3% from the figure reported in the year-ago quarter. The consensus mark for earnings is pegged at $1.09 per share, which suggests a drop of 47.3% from the year-ago quarter’s reported figure. The consensus mark has been unchanged in the past 30 days.
In the last reported quarter, the company posted a negative earnings surprise of 83.3%. It delivered an earnings beat of 179.8%, on average, in the trailing four quarters.
The Aaron's Company, Inc. Price and EPS Surprise
The Aaron's Company, Inc. price-eps-surprise | The Aaron's Company, Inc. Quote
Factors to Note
Aaron’s has been witnessing weak lease revenues and fees, and drab retail sales at the Aaron's and BrandsMart businesses. These are likely to have dented the company’s top-line performance in the to-be-reported quarter. The Aaron’s Business segment has been witnessing lesser lease portfolio size and lease renewal rate, coupled with fewer exercises of early purchase options and weak retail sales.
The company has been impacted by changing market dynamics. Sluggish demand for discretionary products due to the impacts of lower income on customers has been mainly hurting retail sales trends, which is likely to have continued in the fourth quarter.
On the last reported quarter’s earnings call, management expected the challenging demand trends to persist in the fourth quarter of 2023 and in 2024. Consequently, management anticipated 2023 revenues to be $2.12-$2.17 billion. For the Aaron’s business, the company predicted revenues of $1.50-$1.54 billion. It anticipated revenues of $615-$630 million for BrandsMart.
Our model estimated lease revenues and fees to decline 2.5% and 7.1%, respectively, in the fourth quarter and 2023. We expect retail sales to be down 17.8% year over year in the fourth quarter and grow 4.7% in 2023.
Brand-wise, we expect revenues for the Aaron’s business to decline 11.2% year over year to $358.8 million in the fourth quarter and 9.8% to $1,536.1 million in 2023. For BrandsMart, revenues are expected to decline 1.3% to $185.2 million in the fourth quarter and increase 13.2% to $625.5 million in 2023.
However, Aaron’s has been advancing its business through the effective use of e-commerce platforms and the implementation of its GenNext strategy. The company has been witnessing strength in its e-commerce platform, driven by flexible payment options, low prices and a wider variety of products.
Some other notable efforts include increased investments in digital marketing, improved shopping experience, same-day and next-day delivery facilities, the personalization of products and a broader assortment, including the latest product categories. Aaron’s express delivery program bodes well. Gains from the e-commerce initiatives are expected to have cushioned the company’s top line in the fourth quarter.
Alongside these initiatives, the company has been focused on cost-reduction measures aimed at improving efficiency and strategic procurement. It is on track to achieve its cost-optimization goals by delivering $35-$40 million in savings in 2023. This underscores management's dedication to enhancing business efficiency. These cost-savings are likely to have aided margins in the to-be-reported quarter.
Zacks Model
Our proven model does not conclusively predict an earnings beat for Aaron's this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Aaron's has a Zacks Rank #5 (Strong Sell) and an Earnings ESP of 0.00%.
Stocks Poised to Beat Earnings Estimates
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:
Netflix (NFLX - Free Report) has an Earnings ESP of +1.98% and currently sports a Zacks Rank #1. NFLX is likely to register top and bottom-line growth when it reports first-quarter 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $9.3 billion, suggesting 13.4% growth from the figure reported in the prior-year quarter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Netflix’s first-quarter earnings is pegged at $4.41 per share, suggesting 53.1% growth from the year-ago quarter’s actual. The consensus mark has moved up 10.3% in the past 30 days.
PVH Corporation (PVH - Free Report) has an Earnings ESP of +0.90% and a Zacks Rank #2 at present. PVH is likely to register bottom-line growth when it reports fourth-quarter fiscal 2023 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $2.4 billion, suggesting a 3.3% decline from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for PVH’s fiscal fourth-quarter earnings is pegged at $3.48 per share, suggesting year-over-year growth of 46.2%. The consensus mark has moved up by a penny in the past seven days.
Planet Fitness (PLNT - Free Report) currently has an Earnings ESP of +3.77% and a Zacks Rank #3. The company is likely to register top and bottom-line growth when it reports fourth-quarter 2023 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $282.3 million, suggesting 0.4% growth from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Planet Fitness’ fourth-quarter earnings is pegged at 58 cents, suggesting 9.4% growth from that reported in the year-ago quarter. The consensus mark has been unchanged in the past 30 days.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.