Aaron Rents, Inc. (RNT) recently hiked its guidance, noting that business has been thriving in this economic environment. Analysts are also bullish on earnings ahead of RNT’s fourth-quarter report, which is scheduled for release next Tuesday.

Company Description

Aaron Rents caters to the moderate-income customer, offering affordable payment plans, quality merchandise and superior service. The company is considered a pioneer in the furniture rental industry, engaging in the lease ownership, rental and retail sale of residential and office furniture, consumer electronics as well as home appliances and accessories.

RNT was founded by R. Charles Loudermilk, Sr. who has held the position of Chairman since it’s inception in 1955. Aaron Rents has more than 1,585 company operated and franchised stores in the United States and Canada.

Recent Events

Aaron Rents recently hiked its earnings guidance and analysts followed suit. The company is projecting 2009 earnings to range between $1.70 and $1.85 per share, up from the previous range of $1.65 to $1.80. Analyst forecasts of $1.76 increased from $1.71 over the past 3 months.

“Aaron’s Sales & Lease Ownership results continue to be strong with growing same store revenues and customer counts,” said Robert C. Loudermilk, Jr., President and Chief Executive Officer of Aaron Rents. “Unlike many other specialty retailers, our business has been thriving in this economic environment. We give customers the ability to obtain necessary home furnishings through non-credit based lease plans not available to them at traditional retail outlets.”

In mid-December, the company announced that it acquired in a cash transaction all the stores of Rosey Rentals, L. P., a franchisee since 2003. RNT explained that Rosey Rentals operated 35 Aaron’s Sales & Lease Ownership franchised stores in six southeastern states with total annual revenues of approximately $45 million, adding that the stores will now be company-operated.

“As in the past, we continue to make acquisitions of franchisees when it is of mutual benefit,” said Robert C. Loudermilk, Jr., President and Chief Executive Officer of Aaron Rents. “Rosey Rentals has been a good franchisee and we hope to continue our relationship in some form in the future. This transaction should add approximately 3% to our top line growth in 2009 and is expected to be accretive to earnings.”

Rewarding Shareholders with Higher Income

RNT declared a quarterly dividend of $.017 per share, which was paid out on January 2. The dividend was boosted by 6.3% from the previous quarterly dividend of $.016 per share.

Management stated that it was pleased to approve the dividend increase as a way to reward shareholders for their confidence in Aaron Rents. The remains positive about its prospects for continuing growth even in difficult economic times.

The fourth-quarter report is scheduled for release on February 17, 2009.

Content Courtesy: Zacks Investment Research

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