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Aaron's (AAN) to Report Q2 Earnings: Can it Beat Estimates?
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The Aaron's Company, Inc. (AAN - Free Report) is slated to report second-quarter 2024 earnings on Aug 5, after the closing bell. The company is likely to register declines in the top and bottom lines in the second quarter.
The Zacks Consensus Estimate for second-quarter revenues is pegged at $510 million, implying a decline of 3.9% from the year-ago quarter's reported figure. For quarterly earnings, the consensus mark is pegged at 3 cents per share, suggesting a significant drop of 92.3% from the 39 cents per share reported in the prior-year quarter. The consensus mark for earnings has increased by a penny in the past 30 days.
In the last reported quarter, the company posted a negative earnings surprise of 87.5%. It delivered an earnings miss of 255.2%, on average, in the trailing four quarters.
The Aaron's Company, Inc. Price, Consensus and EPS Surprise
Aaron's has been witnessing continued challenges from sluggish demand for discretionary products across the industry. This has resulted in lower overall sales trends for Aaron’s. We expect the persistence of these trends to have weighed on its top-line performance for the second quarter.
The company’s Aaron’s segment revenues have been impacted by lower lease renewal rates due to the increasing mix of e-commerce agreements written into the portfolio. This trend is expected to have persisted in the second quarter. The company is working toward improving its lease decision technology to enhance controls to mitigate risk, which is likely to generate improvements in write-offs.
Additionally, the retail sales at BrandsMart are expected to have been impacted by soft customer traffic and shifts toward lower-priced products in key categories for the to-be-reported quarter.
Additionally, elevated operating costs, driven by increased investments in advertising and higher provisions for lease merchandise write-offs, are hurting Aaron's bottom line and adjusted EBITDA. These issues are likely to have continued affecting the company's financial performance in the second quarter.
However, Aaron’s has been leveraging several key options to strengthen its e-commerce platform. This includes offering flexible payment options, maintaining low prices and providing a wider variety of products. Notable efforts also include increased investments in digital marketing, enhancing the shopping experience, and offering same-day and next-day delivery facilities. The company is focusing on product personalization and expanding its assortment to include the latest product categories. These factors are expected to have contributed to improved top-line in the to-be-reported quarter.
The company remains excited about its new omnichannel lease decisioning and customer acquisition program, which provides leasing power to all Aaron's customers. This program has been driving significantly higher conversion rates of lease applications, which is expected to have bolstered total lease portfolio size in the to-be-reported quarter.
Aaron’s remains on track with its market optimization strategy, which includes the GenNext stores and hub, as well as the showroom program. This strategy has been delivering significant financial performance by improving in-store customer experience and enhancing the operating model. The benefits from these initiatives are likely to have offered some relief to the company’s performance in the second quarter, helping to alleviate the impact of challenges encountered in the segments.
Earnings Whispers
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 before they’re reported with our Earnings ESP Filter.
Aaron's has an Earnings ESP of -171.43% and a Zacks Rank #3.
Stocks With the Favorable Combination
Here are three other companies worth considering, as our model shows that these have the correct combination to beat on earnings this time:
Ralph Lauren Corporation (RL - Free Report) currently has an Earnings ESP of +0.56% and carries a Zacks Rank #3. The company is likely to register a top-line decline and bottom-line increase when it reports first-quarter fiscal 2025 numbers. The Zacks Consensus Estimate for Ralph Lauren’s quarterly revenues is pegged at $1.5 billion, indicating a dip of 0.6% 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 Ralph Lauren's quarterly earnings of $2.45 per share suggests a rise of 4.7% from the year-ago quarter’s levels. RL has a trailing four-quarter earnings surprise of 10.0%, on average.
Under Armour, Inc. (UAA - Free Report) currently has an Earnings ESP of +15.74% and a Zacks Rank #3. The company is likely to register a decline in the top and the bottom line when it reports first-quarter fiscal 2025 numbers. The Zacks Consensus Estimate for Under Armour quarterly revenues is pegged at $1.1 billion, which indicates a decrease of 13.5% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Under Armour’s first-quarter fiscal 2025 loss per share is pegged at 8 cents, suggesting a significant decline from earnings of 2 cents reported in the year-ago quarter. UAA has a trailing four-quarter earnings surprise of 77.7%, on average.
Gildan Activewear Inc. (GIL - Free Report) currently has an Earnings ESP of +0.94% and a Zacks Rank #3. The company is expected to register top and bottom-line growth when it reports second-quarter 2024 numbers. The Zacks Consensus Estimate for GIL’s quarterly revenues is pegged at $851.9 million, which suggests an increase of 1.4% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for Gildan Activewear's quarterly earnings of 71 cents suggests an increase of 12.7% from the year-ago quarter’s levels. GIL has a trailing four-quarter earnings surprise of 5.6%, on average.
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Aaron's (AAN) to Report Q2 Earnings: Can it Beat Estimates?
The Aaron's Company, Inc. (AAN - Free Report) is slated to report second-quarter 2024 earnings on Aug 5, after the closing bell. The company is likely to register declines in the top and bottom lines in the second quarter.
The Zacks Consensus Estimate for second-quarter revenues is pegged at $510 million, implying a decline of 3.9% from the year-ago quarter's reported figure. For quarterly earnings, the consensus mark is pegged at 3 cents per share, suggesting a significant drop of 92.3% from the 39 cents per share reported in the prior-year quarter. The consensus mark for earnings has increased by a penny in the past 30 days.
In the last reported quarter, the company posted a negative earnings surprise of 87.5%. It delivered an earnings miss of 255.2%, on average, in the trailing four quarters.
The Aaron's Company, Inc. Price, Consensus and EPS Surprise
The Aaron's Company, Inc. price-consensus-eps-surprise-chart | The Aaron's Company, Inc. Quote
Key Factors to Note
Aaron's has been witnessing continued challenges from sluggish demand for discretionary products across the industry. This has resulted in lower overall sales trends for Aaron’s. We expect the persistence of these trends to have weighed on its top-line performance for the second quarter.
The company’s Aaron’s segment revenues have been impacted by lower lease renewal rates due to the increasing mix of e-commerce agreements written into the portfolio. This trend is expected to have persisted in the second quarter. The company is working toward improving its lease decision technology to enhance controls to mitigate risk, which is likely to generate improvements in write-offs.
Additionally, the retail sales at BrandsMart are expected to have been impacted by soft customer traffic and shifts toward lower-priced products in key categories for the to-be-reported quarter.
Additionally, elevated operating costs, driven by increased investments in advertising and higher provisions for lease merchandise write-offs, are hurting Aaron's bottom line and adjusted EBITDA. These issues are likely to have continued affecting the company's financial performance in the second quarter.
However, Aaron’s has been leveraging several key options to strengthen its e-commerce platform. This includes offering flexible payment options, maintaining low prices and providing a wider variety of products. Notable efforts also include increased investments in digital marketing, enhancing the shopping experience, and offering same-day and next-day delivery facilities. The company is focusing on product personalization and expanding its assortment to include the latest product categories. These factors are expected to have contributed to improved top-line in the to-be-reported quarter.
The company remains excited about its new omnichannel lease decisioning and customer acquisition program, which provides leasing power to all Aaron's customers. This program has been driving significantly higher conversion rates of lease applications, which is expected to have bolstered total lease portfolio size in the to-be-reported quarter.
Aaron’s remains on track with its market optimization strategy, which includes the GenNext stores and hub, as well as the showroom program. This strategy has been delivering significant financial performance by improving in-store customer experience and enhancing the operating model. The benefits from these initiatives are likely to have offered some relief to the company’s performance in the second quarter, helping to alleviate the impact of challenges encountered in the segments.
Earnings Whispers
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 before they’re reported with our Earnings ESP Filter.
Aaron's has an Earnings ESP of -171.43% and a Zacks Rank #3.
Stocks With the Favorable Combination
Here are three other companies worth considering, as our model shows that these have the correct combination to beat on earnings this time:
Ralph Lauren Corporation (RL - Free Report) currently has an Earnings ESP of +0.56% and carries a Zacks Rank #3. The company is likely to register a top-line decline and bottom-line increase when it reports first-quarter fiscal 2025 numbers. The Zacks Consensus Estimate for Ralph Lauren’s quarterly revenues is pegged at $1.5 billion, indicating a dip of 0.6% 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 Ralph Lauren's quarterly earnings of $2.45 per share suggests a rise of 4.7% from the year-ago quarter’s levels. RL has a trailing four-quarter earnings surprise of 10.0%, on average.
Under Armour, Inc. (UAA - Free Report) currently has an Earnings ESP of +15.74% and a Zacks Rank #3. The company is likely to register a decline in the top and the bottom line when it reports first-quarter fiscal 2025 numbers. The Zacks Consensus Estimate for Under Armour quarterly revenues is pegged at $1.1 billion, which indicates a decrease of 13.5% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Under Armour’s first-quarter fiscal 2025 loss per share is pegged at 8 cents, suggesting a significant decline from earnings of 2 cents reported in the year-ago quarter. UAA has a trailing four-quarter earnings surprise of 77.7%, on average.
Gildan Activewear Inc. (GIL - Free Report) currently has an Earnings ESP of +0.94% and a Zacks Rank #3. The company is expected to register top and bottom-line growth when it reports second-quarter 2024 numbers. The Zacks Consensus Estimate for GIL’s quarterly revenues is pegged at $851.9 million, which suggests an increase of 1.4% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for Gildan Activewear's quarterly earnings of 71 cents suggests an increase of 12.7% from the year-ago quarter’s levels. GIL has a trailing four-quarter earnings surprise of 5.6%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.