The Aarons Co Inc (AAN) Q3 2023 Earnings: Revenue Down 11.4%, Adjusted EBITDA Decreases 33.8%
Third quarter consolidated revenues were $525.7 million, a decrease of 11.4% compared to the same period last year.
Adjusted EBITDA was $25.3 million, a decrease of 33.8% from the prior year quarter.
Loss per share was $0.13; Non-GAAP EPS was $0.01.
The company returned $9.5 million of capital to shareholders.
On October 23, 2023, The Aarons Co Inc (NYSE:AAN) released its third quarter 2023 financial results. The company reported consolidated revenues of $525.7 million, marking an 11.4% decrease compared to the same period last year. Adjusted EBITDA was $25.3 million, a decrease of 33.8% from the prior year quarter. The company also reported a loss per share of $0.13, while Non-GAAP EPS was $0.01.
Company Performance and Financial Highlights
The Aarons Co Inc (NYSE:AAN) reported that write-offs were 6.1% in the Aaron's Business, an improvement of 140 basis points. The company's cost optimization initiatives are on track to achieve their $35 to $40 million target for 2023. The company also returned $9.5 million of capital to shareholders.
The company's earnings were ahead of internal expectations largely due to a larger lease portfolio size and lower write-offs at the Aaron's Business, and ongoing cost optimization. The company ended the quarter with cash and cash equivalents of $39.3 million and debt of $187.5 million.
CEO Commentary
I am pleased that we delivered third quarter consolidated company earnings ahead of our internal expectations. 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. During the quarter, we opened three Aaron's stores in new markets and our first new BrandsMart store since acquiring the business, and we remain focused on positioning both businesses for growth." - Douglas Lindsay, The Aarons Company CEO
Financial Tables and Analysis
The company's consolidated results for Q3 2023 showed a decrease in revenues by 11.4% to $525.7 million from $593.4 million in Q3 2022. The net loss improved by 73.5% to $4.1 million from $15.6 million in the same period last year. Adjusted EBITDA decreased by 33.8% to $25.3 million from $38.2 million in Q3 2022.
The decrease in consolidated revenues was primarily due to lower lease revenues and fees and lower retail sales at the Aaron's Business, as well as lower retail sales at BrandsMart. The improvement in net loss was primarily due to lower total operating expenses at both business segments, including lower write-offs at the Aaron's Business segment, partially offset by lower revenues at both business segments.
Updated Full Year Outlook
The company has updated its full year outlook for 2023, narrowing the range for all components. This current outlook assumes no significant deterioration in the current retail environment, state of the U.S. economy, or global supply chain, as compared to its current condition.
For more details about The Aarons Co Inc (NYSE:AAN)'s Q3 2023 financial results, visit investor.aarons.com.
This article first appeared on GuruFocus.
