ATLANTA - The Aaron's (NYSE:AAN) Company, Inc. (NYSE: AAN), a prominent lease-to-own retailer, today announced its financial outcomes for the second quarter of 2024, revealing a net loss of $11.9 million with revenues totaling $503.1 million. The adjusted EBITDA for the quarter was $24.5 million, with a reported loss per share of $0.39, and a non-GAAP loss per share of $0.07.
In a significant development, Aaron's disclosed that it has entered into a definitive agreement to be acquired by IQVentures Holdings, LLC, a leading fintech organization, for $10.10 per share. This transaction values the company at approximately $504 million and is anticipated to be finalized by the end of the year, pending shareholder approval and other customary closing conditions.
The company's lease portfolio size decreased by 2.0% year-over-year, while same store lease portfolio size saw a modest increase of 1.6%. Aaron's Business segment reported a growth of 6.1% in recurring revenue written, bolstered by an 11.1% increase in lease merchandise deliveries. Meanwhile, e-commerce recurring revenue written surged by 79.4%, benefiting from new omnichannel lease decisioning and customer acquisition programs.
On the retail front, BrandsMart, a subsidiary of Aaron's, experienced a decrease in comparable sales by 7.3%. Despite this, Aaron's has declared a quarterly cash dividend of $0.125 per share, which is scheduled to be paid on October 3, 2024.
Due to the pending acquisition by IQVentures, Aaron's has announced that it will not host an earnings conference call for this quarter and is withdrawing its financial outlook for the rest of 2024.
InvestingPro Insights
The Aaron's Company, Inc. (NYSE: AAN) may have reported a net loss and revenue decline in its recent quarterly results, but the proposed acquisition by IQVentures Holdings presents a new chapter for the company. InvestingPro data shows a market capitalization of $314.59 million, reflecting the market's current valuation of the business. Despite the recent financial performance, the company has a strong shareholder yield, which is a key InvestingPro Tip and an attractive feature for investors. This is further supported by the fact that Aaron's has raised its dividend for three consecutive years, a testament to its commitment to returning value to shareholders.
InvestingPro data also reveals that Aaron's has a Price to Earnings (P/E) Ratio of -12.7 on a trailing basis, but analysts forecast a more positive outlook with an adjusted P/E ratio of 7.15 for the last twelve months as of Q1 2024. This suggests an expectation of profitability in the near term, aligning with another InvestingPro Tip that analysts predict the company will be profitable this year. The company's liquid assets also exceed its short-term obligations, indicating a stable financial position to meet immediate liabilities.
The company's stock performance has been robust over the last three months, with a 46.69% total return, showcasing a strong short-term recovery in investor confidence. For those interested in diving deeper into Aaron's financial health and stock performance, InvestingPro offers additional tips and insights. Currently, there are five more InvestingPro Tips available, which can be accessed by visiting https://www.investing.com/pro/AAN.
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