Factors Likely to Decide Aaron's (AAN) Fate in Q3 Earnings
The Aaron's Company, Inc. AAN is scheduled to report third-quarter 2023 results on Oct 23. This lease-to-own provider is likely to witness declines in the top and the bottom lines when it reports third-quarter results.
The Zacks Consensus Estimate for third-quarter earnings is pegged at 6 cents per share, which indicates a sharp decline of 9.5% from the year-ago quarter’s reported figure. However, the consensus mark has been unchanged in the past 30 days. The consensus mark for revenues is pegged at $537.3 million, indicating a decline of 81% from the figure reported in the year-ago quarter.
We expect the company’s third-quarter total revenues to decrease 9.3% year over year to $538 million and the bottom line to decline 83% to 5 cents per share.
In the last reported quarter, the company posted a negative earnings surprise of 116.7%. It delivered an earnings beat of 224%, 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 strength in its e-commerce platform, driven by increased website traffic and a higher conversion rate. Some other notable efforts are 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. Its express delivery program bodes well.
Moving on, the company’s latest acquisition of appliance and electronics retailer, BrandsMart, has strengthened Aaron’s market position and helped expand the customer base. The company remains on track with its GenNext strategy, driven by positive customer feedback since the launch of this initiative in 2018.
However, weak lease revenues and fees, and drab retail sales are likely to have dented the top-line performance in the quarter under review. 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.
Also, high inflation and other challenging economic conditions continue to impact its customers. On its last reported quarter’s earnings call, management expected both segments to continue experiencing softness in customer demand in its core product categories, including appliances, furniture and electronics, in the second half of the year.
Zacks Model
Our proven model doesn’t 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 #3 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:
Caesars Entertainment CZR currently has an Earnings ESP of +37.22% and a Zacks Rank #2. CZR is likely to register top and bottom-line growth when it reports third-quarter 2023. The Zacks Consensus Estimate for its quarterly revenues is pegged at $2.92 billion, suggesting 1% 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 Caesars Entertainment’s third-quarter earnings is pegged at 26 cents, suggesting 8.3% growth from the 24 cents reported in the year-ago quarter. The consensus mark has moved up by 2 cents in the past 30 days.
Marriott International MAR currently has an Earnings ESP of +1.59% and a Zacks Rank #3. MAR is likely to register top and bottom-line growth when it reports third-quarter 2023. The Zacks Consensus Estimate for its quarterly revenues is pegged at $5.91 billion, suggesting 11.2% growth from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Marriott’s third-quarter earnings is pegged at $2.09, suggesting year-over-year growth of 23.8%. The consensus mark has moved up by a penny in the past 30 days.
Cinemark Holdings CNK currently has an Earnings ESP of +70.56% and a Zacks Rank #3. The company is likely to register top and bottom-line growth when it reports third-quarter 2023. The Zacks Consensus Estimate for its quarterly revenues is pegged at $798.6 million, suggesting 22.8% growth from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Cinemark Holdings’ third-quarter earnings is pegged at 33 cents, suggesting 265% growth from that reported in the year-ago quarter. The consensus mark has moved up by a penny in the past 30 days.
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