Aaron Rents, Inc., a leader in the sales and lease ownership, specialty retailing and rental of residential and office furniture, consumer electronics and home appliances and accessories, announced revised store opening plans and commented on current business conditions.
"Our goal for 2007 was to add 250 new stores, a combination of Company- operated and franchised stores," said R. Charles Loudermilk, Sr., Chairman and Chief Executive Officer of Aaron Rents. "At the end of September 2007 we anticipate over 115 of these stores will be completed. However it is evident now, due primarily to construction delays, that all of these stores will not be ready to conduct business by the end of the year. Although hard to exactly predict, we anticipate that 50 to 75 of these additional stores will be pushed into 2008."
"We expect operating costs as a percentage of revenue will be higher than expected in the third and fourth quarter due primarily to these opening delays as we continue to build resources in anticipation of adding new stores. In addition, we have seen collections a little slower and associated write-offs higher than expected so far in the third quarter. We anticipate that the operating cost pressures will subside as revenue is generated as the new stores open and also that collection trends will shortly return to more normalized levels," continued Mr. Loudermilk.
"We expect overall revenues for the third quarter of 2007 to be up over 13% compared to the third quarter of last year. Revenues in the Aaron's Sales & Lease Ownership division should increase over 15% in the third quarter compared to the same quarter a year ago. In addition, we anticipate that same store revenues in the Aaron's Sales & Lease Ownership division will increase close to 5% in the third quarter compared to the same period last year and that same store core rental revenues will be up approximately 7%. Due to the operating cost pressures mentioned above our results for the third and fourth quarter of 2007 will probably be at the low end of our earnings guidance or somewhat below it. We will discuss revenue and earnings guidance for the remainder of 2007 and the 2008 year as well as new store opening plans when we announce third quarter results on October 24."
Aaron Rents, Inc., based in Atlanta, currently has more than 1,450 Company-operated and franchised stores in 48 states and Canada for the rental and sale of residential and office furniture, accessories, consumer electronics and household appliances. The Company also manufactures furniture, bedding and accessories at 13 facilities in five states.
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