Here's How Aaron's (AAN) is Poised Just Ahead of Q1 Earnings

Core Viewpoint - The Aaron's Company, Inc. is expected to report a decline in both revenue and earnings for the first quarter of 2024, with a consensus estimate indicating a loss of 8 cents per share compared to earnings of 66 cents per share in the same quarter last year, and a revenue decline of 6.7% to $517.4 million [1][4]. Group 1: Financial Performance Expectations - The Zacks Consensus Estimate for the bottom line is a loss of 8 cents per share, a significant drop from earnings of 66 cents per share reported in the year-ago quarter [1]. - Revenue is expected to decline by 6.7% year-over-year, with a consensus mark of $517.4 million [1]. - The company experienced a negative earnings surprise of 966.7% in the last reported quarter and an average earnings miss of 199.4% over the trailing four quarters [1][2]. Group 2: Business Segment Challenges - The Aaron's Business segment is facing sluggishness, characterized by a smaller lease portfolio size, lower lease renewal rates, and weak retail sales [2][3]. - Weak lease revenues and fees, along with poor retail sales at both Aaron's and BrandsMart, are anticipated to negatively impact the company's results [2]. - The demand for discretionary products has been adversely affected by lower customer income, which is expected to continue affecting retail sales trends in the first quarter [3]. Group 3: Operational Insights - The company has projected a lower consolidated adjusted EBITDA for the first quarter, estimated to represent about 20% of the overall adjusted EBITDA for the year, alongside a net loss [4]. - Lease revenues and fees are expected to decline by 8.9%, with revenues for the Aaron's business and BrandsMart projected to decrease by 5.3% and 7%, respectively [4]. Group 4: Strategic Initiatives - The company is advancing its business through effective e-commerce strategies, including flexible payment options, competitive pricing, and a wider product variety [5]. - Investments in digital marketing, improved shopping experiences, and express delivery programs are expected to provide some support to the company's performance [5]. Group 5: Earnings Prediction Model - The Zacks model indicates that the company does not have a conclusive prediction for an earnings beat, with an Earnings ESP of 0.00% and a Zacks Rank of 4 (Sell) [6].