Atlanta, Georgia based Aaron’s Inc. (AAN), a specialty retailer of consumer electronics, residential and office furniture, household appliances, and accessories, recently declared that its board of directors has increased the company’s share repurchase authorization by 5,955,204 to 10,000,000 shares, which reflects the robust long-term growth outlook of the company. Earlier, the company’s board of directors has authorized it to repurchase 4,044,796 shares.
Aaron’s has always been committed to create value for its shareholders by returning capital in the form of dividends and share repurchase program. To improve shareholders’ wealth, the company will repurchase shares from time to time depending on the market conditions.
Prior to this, on May 04, 2011, Aaron’s board of directors approved a quarterly cash dividend of 13 cents per share on its common stock, which will be paid on July 05, 2011, to stockholders of record as of June 06, 2011.
First-Quarter 2011 Earnings Update
Recently, the company has registered an earnings per share growth of 22.0% in the first quarter of 2011, climbing to 55 cents a share from the year-ago quarter earnings of 45 cents a share. Aaron’s also outpaced the Zacks Consensus Estimate of 51 cents a share.
Aaron’s top line jumped 8.0% to $532.7 million from $495.3 million in the year-ago quarter. The company has been witnessing positive trends in comparable-store sales. After a 6.2% increase in the fourth quarter of fiscal 2010, comparable-store sales climbed another 6.0% in the quarter under review. However, total revenue marginally fell short of the Zacks Consensus Estimate of $534.0 million.
Management Guidance
The company expects to report total revenue of $480 million and earnings per share of 38 cents to 42 cents in the second quarter of fiscal 2011. For fiscal 2011, Aaron’s total revenue came in at $2.0 billion. Moreover, the company expects to earn in the range of $1.69 to $1.81 per share, indicating an increase from the previous guided range of $1.61 to $1.77 per share.
Management targets new store growth for both the company-operated and franchised stores to be in between 5% to 9% for 2011.
Aaron’s is a rent-to-own operator in the United States and has a low price provider strategy. The company is involved in the rental and specialty retailing of consumer electronics, residential and office furniture, household appliances, and accessories.
Aaron’s, which competes with Rent-A-Center Inc. (RCII), currently holds a Zacks #1 Rank, implying a short-term ‘Strong Buy’ rating on the stock. Besides, the company retains a long-term ‘Neutral’ recommendation on the stock.
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