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Factors Likely to Decide Aaron's (AAN) Fate in Q2 Earnings

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The Aaron's Company, Inc. is scheduled to report second-quarter 2021 results on July 27. The Zacks Consensus Estimate for second-quarter earnings is pegged at 64 cents per share, which has remained stable in the past 30 days. For quarterly revenues, the Zacks Consensus Estimate stands at $446.7 million for the to-be-reported quarter.

In the last reported quarter, the company delivered an earnings surprise of 121.4%.

Key Factors to Note

Aaron’s has been benefiting from higher customer deliveries, a robust lease portfolio, increased focus on advanced technology, enhanced marketing efforts and strength in its e-commerce business. Strong customer payment activity and improved lease portfolio size bode well for the company.

Further, the company has been witnessing continued strength in its e-commerce business, even after stores reopened. Solid online traffic, particularly at its website aarons.com, remains a key growth driver. Such upsides are likely to have aided the company’s top line in the second quarter. In its last earnings call, management anticipated revenues to be higher in the first half of 2021 compared with the second half.

Aaron’s GenNext store strategy backed by enhanced technologies, a better brand image and expansion of products is expected to have contributed to its second-quarter results.

However, it has been reeling under sluggishness in franchisee revenues due to reduced franchise locations. Adverse impacts stemming from this might have hurt the second-quarter results.

The Aarons Company, Inc. Price and EPS Surprise

Zacks Model

Our proven model doesn’t 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 #3 and an Earnings ESP of 0.00%.

Stocks Poised to Beat Earnings Estimates

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.

Gildan Activewear, Inc. (GIL - Free Report) has an Earnings ESP of +1.41% and a Zacks Rank #1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Crocs (CROX - Free Report) currently has an Earnings ESP of +4.43% and a Zacks Rank #2.

Deckers Outdoor Corp. (DECK - Free Report) currently has an Earnings ESP of +88.00% and a Zacks Rank #2.


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