ATLANTA – Lease-purchase specialist Aaron’s Inc. reported a 6.4% increase in revenues for the second quarter ended June 30, which were driven largely by record double-digit revenue increases in its Progressive Leasing segment.
Consolidated revenues totaled $1.03 billion, up from $968.1 million in the second quarter of 2019. This was due to a 14.2% increase in revenues at Progressive, offset by a 1.4% increase in same store revenues for the Aaron’s business.
Net earnings totaled $68.4 million, compared with $42.7 million in the second quarter of last year. These net earnings reflected $7 million and $18.7 million in pretax restructuring charges for 2020 and 2019 respectively.
Diluted earnings per share for the second quarter were $1.01. This compared with 62 cents per share in the second quarter of 2019.
The company said it also generated $360.8 million in cash from operations for the six months ended June 30 and ended the quarter with $313.1 million in cash, compared with a cash balance of $57.8 million at the end of 2019. The company’s total available liquidity was about $800 million as of June 30.
“The company’s second quarter results significantly exceeded our expectations as we managed the business through the uncertainty caused by the COVID-19 pandemic,” said John Robinson, CEO. “Progressive’s results were favorably impacted by improving invoice growth throughout the quarter, operating expense management and strong customer payment activity. Similarly, the Aaron’s Business second quarter financial strength is the result of strong customer payment activity, lower write-offs, and operating expense management. We continue to maintain a conservatively capitalized balance sheet and have experienced strong year-to-date operating cash flow.”
Revenues in the Progressive Leasing segment rose to a record $589.7 million, compared with $516.3 million in the second quarter of 2019. Second quarter invoice volume fell 2.2% due primarily to COVID-19 related closures of many retail partner locations, the company said, although these have begun to reopen.
Invoice volume per active door was up 1.7%, while active doors were down 3.9% to about 19,000. The segment had 902,000 customers as of June 30, down 0.8% from the same period last year.
Earnings before income taxes for the second quarter of 2020 were $59.8 million compared with $58.4 million in the prior year period.
Total revenues for the Aaron’s Business segment decreased 2.8% to $431 million, from $443.2 million last year. This was due primarily to the net reduction of 185 stores during the 15-month period ended June 30 and the temporary impact of COVID-19 related showroom closures during the second quarter.
Same store revenues were up 1.4% due primarily to strong customer payment activity including early buyout revenue and retail sales along with continued growth in e-commerce revenues.
Customer count on a same store basis was down 6.5%, and company–operated Aaron’s stores had an 8.7% YOY drop in customers as of June 30, to 898,000.
Lease revenue and fees for the three months ended June 30 decreased 2.8% compared with the same period in 2019. Non-retail sales, which primarily consist of merchandise sales to the company’s franchisees, decreased 3.2% for the second quarter of 2020 compared with the same period of the prior year.