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Factors Likely to Decide Aaron's (AAN) Fate in Q1 Earnings

Zacks Equity Research
·3 min read

Aaron’s, Inc. AAN is scheduled to report first-quarter 2020 results on May 7. In the trailing four quarters, the company’s bottom line outperformed the Zacks Consensus Estimate by 4.8%, on average.

The consensus mark for Aaron’s first-quarter earnings is pegged at 80 cents, indicating a decline of 25.9% from the prior-year quarter’s reported figure. Notably, the consensus mark remained steady in the past 30 days. For quarterly revenues, the consensus mark stands at $1.05 billion, suggesting an increase of 3.7% from the prior-year quarter’s reported figure.

Key Factors to Note

Aaron’s has been reeling under adverse impacts stemming from the COVID-19 outbreak, which has led to supply-chain disruptions, a slowdown in production activities and reduced demand for several commodities. The Aaron's Business segment has closed stores and will be operating only online until further notice, with curbside services like order processing, merchandise pickup, returns and payments. Also, all in-home installation services will not be available until further notice. The impacts of limited operations are likely to get reflected in the first-quarter results. In fact, the consensus mark for revenues in the Aaron’s Business segment is pegged at $435 million, indicating a decline of 9.4% from the year-ago period’s reported figure.

However, management is looking into every nook and cranny to boost growth. Additionally, the robust performance of e-commerce and enhanced productivity are likely to have driven the company’s first-quarter results. Moreover, it is on track with transformational initiatives.

Aaron's, Inc. Price and EPS Surprise

Aaron's,  Inc. Price and EPS Surprise
Aaron's, Inc. Price and EPS Surprise

 

 

Aaron's, Inc. price-eps-surprise | Aaron's, Inc. Quote

What the Zacks Model Predicts

Our proven model does not conclusively predict an earnings beat for Aaron’s this time around. 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 #4 (Sell) and an Earnings ESP of -3.92%.

Stocks With Favorable Combinations

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

J. C. Penney Company JCP currently has an Earnings ESP of +6.86% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Walmart WMT has an Earnings ESP of +2.38% and a Zacks Rank #3, at present.

Macy’s M currently has an Earnings ESP of +3.14% and a Zacks Rank #3.

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Aaron's, Inc. (AAN) : Free Stock Analysis Report
 
Walmart Inc. (WMT) : Free Stock Analysis Report
 
J. C. Penney Company, Inc. (JCP) : Free Stock Analysis Report
 
Macy's, Inc. (M) : Free Stock Analysis Report
 
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