News

The Aaron's Company, Inc. AAN is scheduled to report first-quarter 2024 results on May 6, after market close. This lease-to-own provider is likely to witness declines in the top and bottom lines when it reports quarterly results.

The Zacks Consensus Estimate for the bottom line is pegged at a loss of 8 cents per share, which indicates a sharp decline from earnings of 66 cents per share reported in the year-ago quarter. The consensus mark has remained unchanged in the past 30 days. The consensus mark for revenues is pegged at $517.4 million, indicating a decline of 6.7% from the year-ago quarter.

In the last reported quarter, the company posted a negative earnings surprise of 966.7%. It delivered an earnings miss of 199.4%, on average, in the trailing four quarters.

Factors to Note

Aaron’s has been witnessing sluggishness across its namesake business unit. The Aaron’s Business segment has been delivering lesser lease portfolio size and lease renewal rate, coupled with fewer exercises of early purchase options and weak retail sales. Also, weak lease revenues and fees, and drab retail sales at the Aaron's and BrandsMart businesses are likely to hurt the company’s results. These headwinds are likely to have dented its top line.

Sluggish demand for discretionary products due to the impacts of lower income on customers has been mainly hurting retail sales trends, which is likely to have continued in the first quarter. On its last quarter’searnings call management cited that the company’s lease portfolio generally shrinks in the first quarter, owing to customers exercising early purchase options during the income tax refund season. It has also been witnessing pressure on demand at BrandsMart, which is likely to persist in the first half of the year. For BrandsMart, management assumes high inflation and other macroeconomic factors to continue putting pressure on customer demand in the first half of the year.

Consequently, Aaron’s had projected first-quarter 2024 consolidated adjusted EBITDA to be lower year over year, representing about 20% of the overall adjusted EBITDA for the year, with a net loss in the first quarter. Our model estimates lease revenues and fees to decline 8.9%. Brand-wise, we expect revenues for the Aaron’s business and BrandsMart to decline 5.3% and 7%, respectively, year over year.

However, Aaron’s has been advancing its business through the effective use of e-commerce platforms and the implementation of its GenNext strategy. The company has been witnessing strength in its e-commerce platform, driven by flexible payment options, low prices and a wider variety of products. Some other notable efforts include increased investments in digital marketing, improved shopping experience, same-day and next-day delivery facilities, the personalization of products and a broader assortment, including the latest product categories. Aaron’s express delivery program bodes well. Gains from these initiatives are expected to have provided some cushion to the company’s performance.

What the Zacks Model Unveils

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 before they’re reported with our Earnings ESP Filter.

Aaron's has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell).

Stocks Poised to Beat Earnings Estimates

Here are some companies, which, according to our model, have the right combination of elements to post an earnings beat:

Central Garden & Pet CENT currently has an Earnings ESP of +4.32% and a Zacks Rank of 1. CENT is likely to register bottom-line growth when it reports second-quarter fiscal 2024 results. The Zacks Consensus Estimate for CENT’s earnings is pegged at 83 cents a share, up 15.3% from the year-ago quarter. The consensus mark has risen a couple of cents in the past 30 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for its revenues is pegged at $894.5 million, suggesting a 1.6% drop from the figure reported in the prior-year quarter.

Planet Fitness PLNT currently has an Earnings ESP of +1.69% and a Zacks Rank of 3. PLNT is likely to register top and bottom-line growth when it reports first-quarter 2024 results. The Zacks Consensus Estimate for its revenues is pegged at $249.4 million, suggesting 12.2% growth from the figure reported in the prior-year quarter.

The consensus estimate for Planet Fitness’ earnings is pegged at 49 cents per share, suggesting 19.5% growth from the year-ago quarter. The consensus mark has moved down by penny in the past 30 days.

Electronic Arts EA currently has an Earnings ESP of +1.03% and a Zacks Rank of 3. NKE is likely to register top and bottom-line decline when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for its revenues is pegged at $1.8 billion, suggesting a 7.7% drop from the figure reported in the prior-year quarter.

The consensus estimate for EA’s earnings is pegged at $1.56 per share, suggesting an 11.9% decline from the year-ago quarter. The consensus mark has remained unchanged in the past 30 days.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.`

7 Best Stocks for the Next 30 Days

Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."

Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.2% per year. So be sure to give these hand picked 7 your immediate attention.

See them now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.