Why Aaron's Company Shares Are Falling today

Aaron's Company Inc AAN reported a third-quarter FY23 sales decline of 11.4% year-on-year to $525.68 million, missing the analyst consensus estimate of $536.10 million.

The decrease in revenues was primarily due to lower lease revenues and fees and lower retail sales at Aaron's Business, as well as lower retail sales at BrandsMart.

The operating loss narrowed to $(3.5) million from $(17.1) million last year.

Adjusted EBITDA for the quarter decreased 33.8% to $25.3 million.

Adjusted EPS of $0.01 missed the consensus estimate of $0.07.

The company held $39.3 million in cash and equivalents as of September 30, 2023. Debt at the end of the quarter totaled $187.5 million.

Aaron's business ended the quarter with 245 GenNext stores, which accounted for over 30% of lease revenues and fees and retail sales.

Aaron had $339.6 million of availability under its $375.0 million unsecured revolving credit facility.

"The Aaron's Business segment is benefiting from our lease decisioning enhancements, which led to lower write-offs and a larger than expected lease portfolio size, despite ongoing challenges in customer demand," said CEO Douglas Lindsay.

Outlook: Aaron's tightened FY23 revenue outlook from $2.12 billion - $2.22 billion to $2.12 billion - $2.17 billion against the consensus of $2.18 billion.

Adjusted EPS guidance has been altered from $1.00 - $1.40 to $1.00 - $1.20 against the consensus of $1.24.

Price Action: AAN shares are trading lower by 5.62% at $8.39 in premarket on the last check Tuesday.