Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 23, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 1-39681 | ||
Entity Registrant Name | THE AARON'S COMPANY, INC. | ||
Entity Incorporation, State or Country Code | GA | ||
Entity Tax Identification Number | 85-2483376 | ||
Entity Address, Address Line One | 400 Galleria Parkway SE | ||
Entity Address, Address Line Two | Suite 300 | ||
Entity Address, City or Town | Atlanta | ||
Entity Address, State or Province | GA | ||
Entity Address, Postal Zip Code | 30339-3182 | ||
City Area Code | 678 | ||
Local Phone Number | 402-3000 | ||
Title of 12(b) Security | Common Stock, $0.50 Par Value | ||
Trading Symbol | AAN | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 300,964,232 | ||
Entity Common Stock, Shares Outstanding (in shares) | 30,361,434 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive Proxy Statement for the 2024 annual meeting of shareholders, to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates, are incorporated by reference into Part III of this Annual Report on Form 10-K. | ||
Entity Central Index Key | 0001821393 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Name | Ernst & Young LLP |
Auditor Location | Atlanta, Georgia |
Auditor Firm ID | 42 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
ASSETS: | ||
Cash and Cash Equivalents | $ 59,035 | $ 27,716 |
Accounts Receivable (net of allowances of $9,029 in 2023 and $8,895 in 2022) | 39,782 | 38,191 |
Lease Merchandise (net of accumulated depreciation and allowances of $411,641 in 2023 and $431,092 in 2022) | 622,262 | 693,795 |
Merchandise Inventories, net | 90,172 | 95,964 |
Property, Plant and Equipment, Net | 269,833 | 267,457 |
Operating Lease Right-of-Use Assets | 465,824 | 459,950 |
Goodwill | 55,750 | 54,710 |
Other Intangibles, Net | 108,158 | 118,528 |
Income Tax Receivable | 10,363 | 5,716 |
Prepaid Expenses and Other Assets | 105,397 | 96,436 |
Total Assets | 1,826,576 | 1,858,463 |
LIABILITIES & SHAREHOLDERS' EQUITY: | ||
Accounts Payable and Accrued Expenses | 292,175 | 264,043 |
Deferred Income Taxes Payable | 83,217 | 87,008 |
Customer Deposits and Advance Payments | 68,391 | 73,196 |
Operating Lease Liabilities | 502,692 | 496,401 |
Debt | 193,963 | 242,413 |
Total Liabilities | 1,140,438 | 1,163,061 |
Commitments and Contingencies (Note 10) | ||
SHAREHOLDERS' EQUITY: | ||
Common Stock, Par Value $0.50 Per Share: Authorized: 112,500,000 Shares at December 31, 2023 and December 31, 2022; Shares Issued: 36,656,650 at December 31, 2023 and 36,100,011 at December 31, 2022 | 18,328 | 18,050 |
Additional Paid-in Capital | 750,751 | 738,428 |
Retained Earnings | 66,202 | 79,073 |
Accumulated Other Comprehensive Loss | (1,355) | (1,396) |
Stockholders' Equity before Treasury Stock | 833,926 | 834,155 |
Treasury Stock: | ||
Treasury Shares at Cost: 6,295,216 Shares at December 31, 2023 and 5,480,353 Shares at December 31, 2022 | (147,788) | (138,753) |
Total Shareholders' Equity | 686,138 | 695,402 |
Total Liabilities & Shareholders' Equity | $ 1,826,576 | $ 1,858,463 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 9,029 | $ 8,895 |
Lease Merchandise, accumulated depreciation and allowances | $ 411,641 | $ 431,092 |
Common stock, par value (in dollars per share) | $ 0.50 | $ 0.50 |
Common stock, authorized (in shares) | 112,500,000 | 112,500,000 |
Common stock, issued (in shares) | 36,656,650 | 36,100,011 |
Treasury shares (in shares) | 6,295,216 | 5,480,353 |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
REVENUES: | |||
Revenues | $ 2,139,890 | $ 2,249,434 | $ 1,845,504 |
COSTS OF REVENUES: | |||
Total cost of revenue | 1,020,571 | 1,087,661 | 686,015 |
GROSS PROFIT | 1,119,319 | 1,161,773 | 1,159,489 |
OPERATING EXPENSES: | |||
Personnel Costs | 507,819 | 515,144 | 495,411 |
Other Operating Expenses, Net | 498,019 | 490,143 | 434,491 |
Provision for Lease Merchandise Write-Offs | 81,495 | 97,564 | 67,888 |
Restructuring Expenses, Net | 15,597 | 32,717 | 9,218 |
Impairment of Goodwill | 0 | 12,933 | 0 |
Separation Costs | 201 | 1,204 | 6,732 |
Acquisition-Related Costs | 3,638 | 14,616 | 0 |
Operating expenses, total | 1,106,769 | 1,164,321 | 1,013,740 |
OPERATING PROFIT (LOSS) | 12,550 | (2,548) | 145,749 |
Interest Expense | (15,512) | (9,875) | (1,460) |
Other Non-Operating Income (Expense), Net | 1,904 | (2,320) | 1,581 |
LOSS BEFORE INCOME TAXES | (1,058) | (14,743) | 145,870 |
INCOME TAX (BENEFIT) EXPENSE | (3,881) | (9,463) | 35,936 |
NET EARNINGS (LOSS) | $ 2,823 | $ (5,280) | $ 109,934 |
(LOSS) EARNINGS PER SHARE (in dollars per share) | $ 0.09 | $ (0.17) | $ 3.33 |
(LOSS) EARNINGS PER SHARE ASSUMING DILUTION (in dollars per share) | $ 0.09 | $ (0.17) | $ 3.26 |
Lease | |||
REVENUES: | |||
Revenues | $ 1,399,514 | $ 1,529,125 | $ 1,633,489 |
COSTS OF REVENUES: | |||
Cost of goods and services sold | 466,648 | 513,659 | 531,859 |
Retail | |||
REVENUES: | |||
Revenues | 620,665 | 585,624 | 57,568 |
COSTS OF REVENUES: | |||
Cost of goods and services sold | 471,946 | 474,879 | 38,033 |
Non-Retail | |||
REVENUES: | |||
Revenues | 96,710 | 110,531 | 128,299 |
COSTS OF REVENUES: | |||
Cost of goods and services sold | 81,977 | 99,123 | 116,123 |
Franchise Royalties and Other Revenues | |||
REVENUES: | |||
Revenues | $ 23,001 | $ 24,154 | $ 26,148 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Statement of Comprehensive Income [Abstract] | ||||
Net Earnings (Loss) | $ 2,823 | $ (5,280) | $ 109,934 | |
Other Comprehensive Income (Loss): | ||||
Unrealized Loss on Derivative Instruments, net of tax | [1] | (425) | (17) | 0 |
Foreign Currency Translation Adjustment | [1] | 466 | (640) | 58 |
Total Other Comprehensive Income (Loss) | 41 | (657) | 58 | |
Comprehensive Income (Loss) | $ 2,864 | $ (5,937) | $ 109,992 | |
[1]he Unrealized Loss on Derivative Instruments is presented net of a tax benefit of $0.1 million, and the Foreign Currency Translation Adjustment is presented net of a tax benefit of $0.3 million. The tax components of the prior year amounts are insignificant. |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Thousands | Total | Treasury Stock | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | ||
Beginning Balance (in shares) at Dec. 31, 2020 | (895,000) | |||||||
Beginning Balance (in shares) at Dec. 31, 2020 | 35,100,000 | |||||||
Beginning Balance at Dec. 31, 2020 | $ 711,325 | $ (15,977) | $ 17,550 | $ 708,668 | $ 1,881 | $ (797) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cash Dividends, $0.125 per share | (13,269) | (13,269) | ||||||
Stock-Based Compensation | 11,517 | 11,517 | ||||||
Reclassification of liability awards to equity awards | 1,841 | 1,841 | ||||||
Issuance of Shares under Equity Plans (in shares) | (114,000) | 459,000 | ||||||
Issuance of Shares under Equity Plans | (142) | $ (2,729) | $ 229 | 2,358 | ||||
Acquisition of Treasury Stock (in shares) | (3,571,000) | |||||||
Acquisition of Treasury Stock | (103,098) | $ (103,098) | ||||||
Net Earnings (Loss) | 109,934 | 109,934 | ||||||
Unrealized Loss on Derivative Instruments, net of tax | [1] | 0 | ||||||
Foreign Currency Translation Adjustment | 58 | [1] | 58 | |||||
Ending Balance (in shares) at Dec. 31, 2021 | (4,580,000) | |||||||
Ending Balance (in shares) at Dec. 31, 2021 | 35,559,000 | |||||||
Ending Balance at Dec. 31, 2021 | 718,166 | $ (121,804) | $ 17,779 | 724,384 | 98,546 | (739) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cash Dividends, $0.125 per share | (14,193) | (14,193) | ||||||
Stock-Based Compensation | 12,814 | 12,814 | ||||||
Issuance of Shares under Equity Plans (in shares) | (165,000) | 541,000 | ||||||
Issuance of Shares under Equity Plans | (2,064) | $ (3,565) | $ 271 | 1,230 | ||||
Acquisition of Treasury Stock (in shares) | (735,000) | |||||||
Acquisition of Treasury Stock | (13,384) | $ (13,384) | ||||||
Net Earnings (Loss) | (5,280) | (5,280) | ||||||
Unrealized Loss on Derivative Instruments, net of tax | (17) | [1] | (17) | |||||
Foreign Currency Translation Adjustment | $ (640) | [1] | (640) | |||||
Ending Balance (in shares) at Dec. 31, 2022 | 5,480,353 | (5,480,000) | ||||||
Ending Balance (in shares) at Dec. 31, 2022 | 36,100,000 | |||||||
Ending Balance at Dec. 31, 2022 | $ 695,402 | $ (138,753) | $ 18,050 | 738,428 | 79,073 | (1,396) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cash Dividends, $0.125 per share | (15,694) | (15,694) | ||||||
Stock-Based Compensation | 12,196 | 12,196 | ||||||
Issuance of Shares under Equity Plans (in shares) | 207,000 | 557,000 | ||||||
Issuance of Shares under Equity Plans | (2,131) | $ (2,536) | $ 278 | 127 | ||||
Acquisition of Treasury Stock (in shares) | (608,000) | |||||||
Acquisition of Treasury Stock | (6,499) | $ (6,499) | ||||||
Net Earnings (Loss) | 2,823 | 2,823 | ||||||
Unrealized Loss on Derivative Instruments, net of tax | (425) | [1] | (425) | |||||
Foreign Currency Translation Adjustment | $ 466 | [1] | 466 | |||||
Ending Balance (in shares) at Dec. 31, 2023 | 6,295,216 | (6,295,000) | ||||||
Ending Balance (in shares) at Dec. 31, 2023 | 36,657,000 | |||||||
Ending Balance at Dec. 31, 2023 | $ 686,138 | $ (147,788) | $ 18,328 | $ 750,751 | $ 66,202 | $ (1,355) | ||
[1]he Unrealized Loss on Derivative Instruments is presented net of a tax benefit of $0.1 million, and the Foreign Currency Translation Adjustment is presented net of a tax benefit of $0.3 million. The tax components of the prior year amounts are insignificant. |
Consolidated Statements of Eq_2
Consolidated Statements of Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Stockholders' Equity [Abstract] | |||
Dividends, per share (in dollars per share) | $ 0.125 | $ 0.11 | $ 0.10 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
OPERATING ACTIVITIES: | |||
Net Earnings (Loss) | $ 2,823 | $ (5,280) | $ 109,934 |
Adjustments to Reconcile Net Earnings (Loss) to Net Cash Provided by Operating Activities: | |||
Depreciation of Lease Merchandise | 459,242 | 505,966 | 524,155 |
Other Depreciation and Amortization | 90,341 | 86,083 | 69,687 |
Provision for Lease Merchandise Write-Offs | 81,495 | 97,564 | 67,888 |
Non-Cash Inventory Fair Value Adjustment | 0 | 23,074 | 0 |
Accounts Receivable Provision | 39,889 | 41,460 | 27,964 |
Stock-Based Compensation | 11,949 | 12,390 | 13,148 |
Deferred Income Taxes | (12,101) | (13,581) | 28,725 |
Impairment of Assets | 3,734 | 29,478 | 5,224 |
Non-Cash Lease Expense | 119,610 | 112,613 | 93,113 |
Other Changes, Net | (8,326) | (10,312) | (5,840) |
Changes in Operating Assets and Liabilities: | |||
Lease Merchandise | (472,155) | (527,511) | (665,381) |
Merchandise Inventories | 5,965 | 5,026 | 0 |
Accounts Receivable | (41,469) | (45,881) | (23,679) |
Prepaid Expenses and Other Assets | (2,422) | 6,284 | (3,863) |
Income Tax Receivable | (4,647) | (2,129) | (2,494) |
Operating Lease Right-of-Use Assets and Liabilities | (122,313) | (124,393) | (106,128) |
Accounts Payable and Accrued Expenses | 35,427 | (1,995) | 6,609 |
Customer Deposits and Advance Payments | (6,628) | (18,424) | (3,022) |
Cash Provided by Operating Activities | 180,414 | 170,432 | 136,040 |
INVESTING ACTIVITIES: | |||
Purchases of Property, Plant & Equipment | (94,415) | (107,980) | (92,704) |
Proceeds from Dispositions of Property, Plant, and Equipment | 17,294 | 21,519 | 14,942 |
Proceeds from Other Investing-Related Activities | 245 | 1,776 | 2,508 |
Cash Used in Investing Activities | (76,876) | (351,377) | (85,375) |
FINANCING ACTIVITIES: | |||
Repayments on Swing Line Loans, Net | (19,250) | 0 | |
Proceeds from Swing Line Loans, Net | 9,250 | ||
Proceeds from Revolver and Term Loan | 71,094 | 291,700 | 0 |
Repayments on Revolver, Term Loan and Financing Leases | (100,469) | (67,793) | |
Proceeds from Revolver, Term Loan and Financing Leases | 9,260 | ||
Repayments on Inventory Loan Program, Net | 0 | (15,541) | 0 |
Dividends Paid | (14,994) | (13,530) | (9,971) |
Acquisition of Treasury Stock | (6,499) | (13,384) | (103,098) |
Issuance of Stock Under Stock Option Plans | 405 | 1,501 | 2,587 |
Shares Withheld for Tax Payments | (2,536) | (3,565) | (2,729) |
Debt Issuance Costs | 0 | (2,758) | 0 |
Cash (Used in) Provided by Financing Activities | (72,249) | 185,880 | (103,951) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | 30 | (51) | (5) |
Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | 31,319 | 4,884 | (53,291) |
Cash, Cash Equivalents, and Restricted Cash at Beginning of Year | 29,341 | 22,832 | 76,123 |
Cash and Cash Equivalents at End of Year: | |||
Cash and Cash Equivalents | 59,035 | 27,716 | 22,832 |
Restricted Cash included in Prepaid Expenses and Other Assets | 1,625 | 1,625 | 0 |
Total Cash, Cash Equivalents, and Restricted Cash at End of Year | 60,660 | 29,341 | 22,832 |
BrandsMart | |||
INVESTING ACTIVITIES: | |||
Acquisitions, Net of Cash Acquired | 0 | (265,630) | 0 |
Other Businesses and Customer Agreements | |||
INVESTING ACTIVITIES: | |||
Acquisitions, Net of Cash Acquired | $ 0 | $ (1,062) | $ (10,121) |
Consolidated Statements Of Co_2
Consolidated Statements Of Comprehensive Income (Loss) (Parenthetical) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Statement of Comprehensive Income [Abstract] | |
Unrealized Loss on Derivative Instruments, Tax Expense | $ 0.1 |
Foreign Currency Translation Adjustment, Tax Benefit | $ 0.3 |
Business and Summary of Signifi
Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Business and Summary of Significant Accounting Policies | BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES As described elsewhere in this Annual Report, the lingering effects of the global pandemic, continued inflationary pressures, general macroeconomic conditions and rising interest rates have led to significant market disruption and has impacted various aspects of our operations, directly and indirectly. Throughout these notes to the consolidated financial statements, the impacts of these items on the financial results for the year ended December 31, 2023 and comparable prior periods have been identified to the best of our ability under the respective sections. For a discussion of trends that we believe have affected our business as a result of these items, see Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations", including the "Highlights," "Consolidated Results of Operations" and "Liquidity and Capital Resources", and Part I, Item 1A "Risk Factors", above. BrandsMart U.S.A. Acquisition On April 1, 2022, the Company completed the previously announced transaction to acquire a 100% ownership of Interbond Corporation of America, doing business as BrandsMart U.S.A. The Company paid total consideration of $230 million in cash under the terms of the agreement and additional amounts for working capital adjustments and transaction related fees. Refer to Note 2 to these consolidated financial statements for additional information regarding the acquisition. Management believes that the BrandsMart U.S.A. acquisition will strengthen the Company's ability to deliver on its mission of enhancing people’s lives by providing easy access to high quality furniture, appliances, electronics, and other home goods through affordable lease-to-own and retail purchase options. Management also believes that value creation opportunities include leveraging the Company's lease-to-own expertise to provide BrandsMart U.S.A.'s customers enhanced payment options and offering a wider selection of products to millions of Aaron's customers, as well as generating procurement savings and other cost synergies. Business Overview Description of Business The Company is a leading, technology-enabled, omni-channel provider of lease-to-own ("LTO") and retail purchase solutions of furniture, electronics, appliances, and other home goods across its brands: Aaron's, BrandsMart U.S.A., BrandsMart Leasing, and Woodhaven Furniture Industries ("Woodhaven"). As of December 31, 2023, the Company's operating and reportable segments are the Aaron's Business and BrandsMart, each as described below. The Aaron's Business segment is comprised of (i) Aaron's branded Company-operated and franchise operated stores; (ii) aarons.com e-commerce platform ("aarons.com"); (iii) Woodhaven; and (iv) BrandsMart Leasing (collectively, the "Aaron’s Business"). The operations of BrandsMart U.S.A. (excluding BrandsMart Leasing) comprise the BrandsMart segment (collectively, "BrandsMart"). Aaron's Business Segment Since its founding in 1955, Aaron's has been committed to serving the overlooked and underserved customer with a dedication to inclusion and improving the communities in which it operates. Through a portfolio of approximately 1,240 stores and its aarons.com e-commerce platform, Aaron's, together with its franchisees, provide consumers with LTO and retail purchase solutions for the products they need and want, with a focus on providing its customers with unparalleled customer service, high approval rates, lease plan flexibility, and an attractive value proposition, including competitive monthly payments and total cost of ownership, as compared to other LTO providers. Woodhaven manufactures and supplies a significant portion of the upholstered furniture leased and sold in Company-operated and franchised Aaron's stores. Launched in 2022, BrandsMart Leasing offers LTO purchase solutions to customers of BrandsMart U.S.A. BrandsMart Segment Founded in 1977, BrandsMart U.S.A. is one of the leading appliance and consumer electronics retailers in the southeast United States and one of the largest appliance retailers in the country with 11 stores in Florida and Georgia and a growing e-commerce presence on brandsmartusa.com. The operations of BrandsMart U.S.A. (other than BrandsMart Leasing) comprise the BrandsMart segment. Basis of Presentation The accompanying consolidated financial statements of the Company and its wholly-owned subsidiaries for the years ended December 31, 2023, December 31, 2022, and December 31, 2021 reflect the historical results of operations, financial position and cash flows of the Company in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). Intercompany balances and transactions between consolidated entities have been eliminated and reflect the historical results of operations, financial position and cash flows of the Company in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). The preparation of the Company's consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. Generally, actual experience has been consistent with management's prior estimates and assumptions. In many cases, management's estimates and assumptions are dependent on estimates of such future developments and may change in the future. In the opinion of management, all adjustments considered necessary for a fair presentation have been included in the accompanying consolidated financial statements. Reclassifications The following reclassifications have been made to the prior periods to conform to the current period presentation. For all previously reported periods prior to April 1, 2022, the Company presented all revenues derived from lease agreements and the related fees, as well as the retail sale of both new and returned lease merchandise from our Company-operated Aaron's stores and fees from our Aaron's Club program within one line in the consolidated statements of earnings, presented as lease and retail revenues. Effective April 1, 2022, the Company revised its presentation to separately present revenues derived from lease agreements at our Company-operated Aaron's stores and e-commerce platform and fees from our Aaron's Club program as lease revenues and fees in the consolidated statements of earnings, with the sale of both new and returned lease merchandise from our Company-operated Aaron's stores being classified as retail sales. This revised presentation does not have an impact on total revenues presented in prior periods. Similarly, for all previously reported periods prior to April 1, 2022, the Company presented the depreciation expense associated with lease merchandise as well as the depreciated costs of merchandise sold within one line in the consolidated statements of earnings, presented as the cost of lease and retail revenues. Effective April 1, 2022, the Company revised its presentation to separately present the depreciation expense associated with lease merchandise in the consolidated statements of earnings, with the costs associated with merchandise sold through our Company-operated Aaron's stores presented as retail cost of sales. This revised presentation does not have an impact on total costs of revenues presented in prior periods. Significant Accounting Policies Segment Reporting As of December 31, 2023, the Company has two operating and reportable segments: Aaron's Business and BrandsMart. During the year ended December 31, 2022, the Company changed its composition of reportable segments to align the reportable segments with the current organizational structure and the operating results that the chief operating decision maker regularly reviews to analyze performance and allocate resources, which includes separate segments for the Aaron's Business and BrandsMart, along with an Unallocated Corporate category for remaining unallocated costs. The Company has retroactively adjusted, for all periods presented, its segment disclosures to align with the current composition of reportable segments. The Aaron's Business segment provides consumers with LTO and retail purchase solutions through the Company's Aaron's stores in the United States and Canada and the aarons.com e-commerce platform. This operating segment also supports franchisees of its Aaron's stores. In addition, the Aaron's Business segment includes the operations of BrandsMart Leasing, which offers lease-to-own solutions to BrandsMart U.S.A. customers, and Woodhaven, which manufactures and supplies a significant portion of the upholstered furniture leased and sold in Company-operated and franchised Aaron's stores. The BrandsMart segment is comprised of the operations of BrandsMart U.S.A. (excluding BrandsMart Leasing), which is one of the leading appliance and consumer electronics retailers in the southeast United States and one of the largest appliance retailers in the country with 11 stores in Florida and Georgia and a growing e-commerce presence on brandsmartusa.com. Revenue Recognition The Company provides lease and retail merchandise, consisting of appliances, electronics, furniture, and other home goods to its customers for lease under certain terms agreed to by the customer and through retail sales. The Company's Aaron's stores, aarons.com e-commerce platform, and BrandsMart Leasing components of the Aaron's Business segment offer leases with flexible ownership plans that can be generally renewed weekly, bi-weekly, semi-monthly, or monthly up to 12, 18 or 24 months. The Aaron's Business segment also earns revenue from the sale of merchandise to customers and Aaron's franchisees, and earns ongoing revenue from Aaron's franchisees in the form of royalties and through advertising efforts that benefit the franchisees. The Company's BrandsMart U.S.A. stores and related brandsmartusa.com e-commerce platform offer the sale of merchandise directly to its customers via retail sales. See Note 6 to these consolidated financial statements for further information regarding the Company's revenue recognition policies and disclosures. Earnings (Loss) Per Share Earnings per share is computed by dividing net earnings (loss) by the weighted average number of shares of common stock outstanding during the period. The computation of earnings (loss) per share assuming dilution includes the dilutive effect of stock options, RSUs, RSAs, PSUs and other awards issuable under the Company's ESPP (collectively, "share-based awards") as determined under the treasury stock method, unless the inclusion of such awards would be anti-dilutive. The following table shows the calculation of weighted-average shares outstanding assuming dilution: Year Ended December 31, (Shares In Thousands) 2023 2022 2021 Weighted Average Shares Outstanding 30,778 30,881 32,992 Dilutive Effect of Share-Based Awards 1 327 — 730 Weighted Average Shares Outstanding Assuming Dilution 31,105 30,881 33,722 1 There was no dilutive effect to the loss per common share for the year ended December 31, 2022 due to the net loss incurred in the period. For the years ended December 31, 2023 and December 31, 2021, 1.3 million and 0.1 million weighted-average share based awards were excluded from the computation of earnings per share assuming dilution, respectively, as the awards would have been anti-dilutive for the period. Lease Merchandise The Company’s lease merchandise is recorded at the lower of depreciated cost, including overhead costs from our distribution centers, or net realizable value. The cost of merchandise manufactured by our Woodhaven operations is recorded at cost and includes overhead from production facilities, shipping costs and warehousing costs. The Company begins depreciating furniture and appliances at the earlier of the lease date or 24 months and one day from its purchase, while all other lease merchandise begins depreciating at the earlier of the lease date or 12 months and one day from its purchase. Lease merchandise fully depreciates over the lease agreement period when on lease, generally 12 to 24 months, and generally 36 months when not on lease. Depreciation is accelerated upon early payout. The following is a summary of lease merchandise, net of accumulated depreciation and allowances: December 31, (In Thousands) 2023 2022 Merchandise on Lease, net of Accumulated Depreciation and Allowances $ 419,531 $ 446,923 Merchandise Not on Lease, net of Accumulated Depreciation and Allowances 1 202,731 246,872 Lease Merchandise, net of Accumulated Depreciation and Allowances 2 $ 622,262 $ 693,795 1 Includes Woodhaven's inventory, which is primarily comprised of raw materials, that has been classified within lease merchandise in the consolidated balance sheets of $8.7 million and $12.9 million as of December 31, 2023 and 2022, respectively. 2 General and administrative overhead costs capitalized into the cost of lease merchandise were $54.0 million, $55.7 million, and $55.0 million for the years ended December 31, 2023, 2022 and 2021, respectively. Capitalized overhead costs remaining in lease merchandise were $55.9 million and $55.1 million as of December 31, 2023 and 2022, respectively. The Aaron's store-based operations' policies require weekly merchandise counts at its store-based operations, which include write-offs for unsalable, damaged, or missing merchandise inventories. Monthly cycle counting procedures are performed at both the Aaron's distribution centers and Woodhaven manufacturing facilities. Physical inventories are also taken at the manufacturing facilities annually. The Company also monitors merchandise levels and mix by division, store, and distribution center, as well as the average age of merchandise on hand. If obsolete merchandise cannot be returned to vendors, its carrying amount is adjusted to its net realizable value or written off. Generally, all merchandise not on lease is available for lease or sale. On a monthly basis, all damaged, lost or unsalable merchandise identified is written off and is included as a component of the provision for lease merchandise write-offs in the accompanying consolidated statements of earnings. The Company records a provision for write-offs using the allowance method, which is included within lease merchandise, net within the consolidated balance sheets. The allowance method for lease merchandise write-offs estimates the merchandise losses incurred but not yet identified by management as of the end of the accounting period based primarily on historical write-off experience. Other qualitative factors are considered in estimating the allowance, such as seasonality and the impacts of uncertainty surrounding inflationary and other economic pressures in the current macroeconomic environment. Therefore, actual lease merchandise write-offs could differ from the allowance. The provision for write-offs is included in provision for lease merchandise write-offs in the accompanying consolidated statements of earnings. The Company writes off lease merchandise on lease agreements that are 60 days or more past due on pre-determined dates twice monthly. The Company writes off lease merchandise on lease agreements for its BrandsMart Leasing operations that are 90 days or more past due on pre-determined dates twice monthly. The following table shows the components of the allowance for lease merchandise write-offs: Year Ended December 31, (In Thousands) 2023 2022 2021 Beginning Balance $ 13,894 $ 12,339 $ 11,599 Merchandise Written off, net of Recoveries (82,477) (96,009) (67,148) Provision for Write-offs 81,495 97,564 67,888 Ending Balance $ 12,912 $ 13,894 $ 12,339 Merchandise Inventories The Company’s merchandise inventories are stated at the lower of weighted average cost or net realizable value, and consist entirely of merchandise held for sale by the BrandsMart segment. In-bound freight-related costs from vendors, net of allowances and vendor rebates, are included as part of the net cost of merchandise inventories. Costs associated with storing and transporting merchandise inventories to our retail stores are expensed as incurred and included within retail cost of sales in the consolidated statements of earnings. During the year ended December 31, 2022, the Company recognized a one-time non-cash charge for a fair value adjustment to the acquired BrandsMart merchandise inventories of $23.1 million, which was included within retail cost of sales in the consolidated statements of earnings. The Company periodically evaluates aged and distressed inventory and establishes an inventory markdown which represents the excess of the carrying value over the amount the Company expects to realize from the ultimate sale of the inventory. Markdowns establish a new cost basis for the inventory and are recorded within retail cost of sales within the consolidated statements of earnings. The write-offs of merchandise inventories associated with the Company's cycle and physical inventory count processes are also included within retail cost of sales in the consolidated statements of earnings. The Company records an inventory reserve for the anticipated loss associated with selling inventories below cost. This reserve is based on management’s current knowledge with respect to inventory levels, sales trends, and historical experience selling or disposing of aged or obsolete inventory. The following is a summary of merchandise inventories, net of allowances: (In Thousands) December 31, 2023 December 31, 2022 Merchandise Inventories, gross $ 91,093 $ 96,945 Reserve for Merchandise Inventories (921) (981) Merchandise Inventories, net $ 90,172 $ 95,964 The following table shows the components of the reserve for merchandise inventories: Year Ended (In Thousands) December 31, 2023 December 31, 2022 Beginning Balance $ 981 $ — Merchandise Written off (618) — Provision for Write-offs 558 981 Ending Balance $ 921 $ 981 Retail and Non-Retail Cost of Sales Included in retail cost of sales, as well as non-retail cost of sales, is the net book value of merchandise sold via retail and non-retail sales, primarily using specific identification. The components of cost of sales are further described below. Depreciation of Lease Merchandise and Other Lease Revenue Costs The primary items classified under the expense category "Depreciation of Lease Merchandise and Other Lease Revenue Costs" are: • Depreciation of the capitalized costs (recorded at the lower of depreciated costs or net realizable value) of available and on rent lease merchandise at the Aaron’s Business segment. Capitalized costs include: ◦ Landed Inventory Costs ◦ Overhead Costs incurred at our internal distribution centers, including transportation costs incurred to transfer inventory from the Company's fulfillment centers to Company Operated stores ◦ Freight expenses associated with receiving the inventory from our vendors ◦ Costs of manufactured inventory at our Woodhaven operations including overhead from production facilities, shipping costs and warehousing costs • Accelerated depreciation associated with early payout transactions • Amortization of Aaron's Business cooperative advertising consideration, received from vendors, that are not specifically identifiable incremental costs incurred in selling those vendor's products • Amortization of rebate credits associated with the leasing of lease merchandise at the Aaron's Business • External service provider fees associated with hosting the Aaron's Club program Retail Cost of Sales - Aaron's Business The primary items classified under the expense category "Retail Cost of Sales" for the Aaron's Business segment are: • Costs of the NBV of lease merchandise (recorded at the lower of depreciated costs or net realizable value) at the Aaron's Business segment including: ◦ Landed Inventory Costs ◦ Overhead Costs incurred at our internal distribution centers, including transportation costs incurred to transfer inventory from the Company's fulfillment centers to Company Operated stores ◦ Freight expenses associated with receiving the inventory from our vendors ◦ Costs of manufactured inventory at our Woodhaven operations including overhead from production facilities, shipping costs and warehousing costs • Amortization of Aaron's Business cooperative advertising consideration, received from vendors, that are not specifically identifiable incremental costs incurred in selling those vendor's products • Amortization of rebate credits associated with the retail sale of lease merchandise at the Aaron's Business Retail Cost of Sales - BrandsMart The primary items classified under the expense category "Retail Cost of Sales" for the BrandsMart Business segment are: • Weighed average costs of landed inventory invoice costs (recorded at the lower of weighted average costs or net realizable value) • Overhead Costs incurred at our internal distribution centers • Freight expenses associated with receiving the inventory from our vendors • Transportation costs incurred to transfer inventory from the Company's fulfillment centers to stores • Cooperative advertising consideration, received from vendors, that are not specifically identifiable incremental costs incurred in selling those vendor's products • Vendor rebate credits associated with the retail sale of merchandise inventories • Subsequent markdowns of merchandise inventories • Third party transportation and internal vehicle charges associated with customer shipping and handling • Charges/Provisions for shrink and obsolescence • Cost of services provided including personnel related costs, replacement costs, and freight expenses Non-Retail Cost of Sales - Aaron's Business The primary items classified under the expense category "Non-Retail Cost of Sales" for the Aaron's Business segment are: • Cost of the NBV of lease merchandise (recorded at the lower of depreciated costs or net realizable value) sold to Aaron's Business franchisees or wholesale customers of our Woodhaven operations which includes: ◦ Landed Inventory Costs ◦ Overhead Costs incurred at our internal distribution centers ◦ Freight expenses associated with receiving the inventory from our vendors ◦ Costs of manufactured inventory at our Woodhaven operations including overhead from production facilities, shipping costs and warehousing costs ◦ Transportation costs incurred to transfer inventory from the Company's fulfillment centers to franchisees and non-retail customers • Amortization of Aaron's Business cooperative advertising consideration, received from vendors, that are not specifically identifiable incremental costs incurred in selling those vendor's products Shipping and Handling Costs Shipping and handling costs are primarily classified within other operating expenses, net in the accompanying consolidated statements of earnings and to a lesser extent, capitalized into the cost of lease merchandise and subsequently depreciated or recognized as cost of retail sales. Shipping and handling costs classified within other operating expenses, net were $64.1 million, $70.1 million and $60.4 million for the years ended December 31, 2023, 2022 and 2021, respectively. Shipping and handling costs capitalized into the cost of lease merchandise were $23.3 million, $27.4 million and $25.4 million for the years ended December 31, 2023, 2022 and 2021, respectively. Advertising The Company expenses advertising costs as incurred. Advertising production costs are initially recognized as a prepaid advertising asset and are expensed when an advertisement appears for the first time. The prepaid advertising asset was $0.1 million and $4.6 million at December 31, 2023 and December 31, 2022, respectively, and is reported within prepaid expenses and other assets on the consolidated balance sheets. Total advertising costs are classified within other operating expenses, net in the consolidated statements of earnings. These advertising costs are presented net of cooperative advertising considerations received from vendors, which represents reimbursement of specific, identifiable and incremental costs incurred in selling those vendors’ products, and are recorded as a reduction of advertising costs. The following table shows total advertising costs, net of cooperative advertising consideration: Year Ended December 31, (In Thousands) 2023 2022 2021 Advertising Costs, Gross $ 75,153 $ 74,864 $ 80,602 Less: Cooperative Advertising Considerations (33,792) (35,743) (26,951) Advertising Costs, Net $ 41,361 $ 39,121 $ 53,651 Stock-Based Compensation The Company has stock-based employee compensation plans, which are more fully described in Note 13 to these consolidated financial statements. The Company estimates the fair value for the options granted on the grant date using a Black-Scholes-Merton option-pricing model. The fair value of each share of restricted stock units ("RSUs"), restricted stock awards ("RSAs") and performance share units ("PSUs") with Company-specific performance criteria is equal to the market value of a share of the Company's common stock on the grant date. For PSUs that are granted with a total shareholder return ("TSR") component, management estimates the fair value using a Monte Carlo simulation valuation model, as these awards are subject to a market condition. For all stock award types, the Company considers whether any material nonpublic information is known to the Company at the time the awards are granted that could impact the determined grant date fair value. No adjustments to fair value were deemed necessary for the years ended December 31, 2023, 2022 or 2021 based on these considerations. The Company estimates the fair value of awards issued under the Company's employee stock purchase plan ("A&R ESPP") using a series of Black-Scholes-Merton pricing models that consider the components of the "lookback" feature of the plan, including the underlying stock, call option, and put option. The design of awards issued under the A&R ESPP is more fully described in Note 13 to these consolidated financial statements. Separation Costs Separation costs include actual expenses after November 30, 2020 associated with the separation and distribution from PROG Holdings, Inc. (referred to herein as "PROG Holdings"), including personnel-related costs and incremental stock-based compensation expense associated with the conversion and modification of unvested and unexercised equity awards related to Company employees, as well as an allocation of similar expenses related to PROG Holdings' corporate and shared function employees. See Note 13 to these consolidated financial statements for additional information regarding the modification of awards that were converted concurrent with the separation and distribution. Separation costs also include one-time expenses incurred by the Company in order to begin operating as an independent, standalone public entity after the completion of the separation and distribution. These costs will be fully expensed in the first quarter of 2024. Acquisition-Related Costs Acquisition-related costs of $3.6 million and $14.6 million were incurred during the years ended December 31, 2023 and 2022, respectively, and primarily represent third-party consulting in 2023, while in 2022 it included third-party consulting as well as banking and legal expenses associated with the acquisition of BrandsMart U.S.A completed April 1, 2022. Income Taxes The Company and its subsidiaries file U.S. federal consolidated income tax returns in the United States, and separate legal entities file in various state and foreign jurisdictions. In all periods presented, the income tax provision has been computed for the entities comprising the Company on a standalone, separate return basis as if the Company were a separate taxpayer. The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. Income taxes as presented attribute deferred income taxes of the Company's standalone consolidated financial statements in a manner that is systematic, rational and consistent with the asset and liability method. The provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from differences between the financial and tax basis of the Company’s assets and liabilities and are adjusted for changes in tax rates and tax laws when such changes are enacted. The Company's largest temporary differences arise principally from the use of accelerated depreciation methods on lease merchandise for tax purposes. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. The Company recognizes uncertain tax positions in the consolidated financial statements when it is more likely than not that the tax position will be sustained upon examination. Uncertain tax positions are measured based on the probabilities that the uncertain tax position will be realized upon final settlement. See further details on income taxes within Note 9 to these consolidated financial statements. Sales Taxes The Company applies the net basis for sales taxes imposed on goods and services in the consolidated statements of earnings. The Company is required by the applicable governmental authorities to collect and remit sales taxes. Accordingly, such amounts are charged to the customer, collected, and remitted directly to the appropriate jurisdictional entity. Cash and Cash Equivalents The Company classifies as cash equivalents any highly liquid investments that have maturity dates of three months or less at the time they are purchased. The Company maintains its cash and cash equivalents at various banks. Bank balances may exceed coverage provided by the Federal Deposit Insurance Corporation ("FDIC"). However, due to the size and strength of the banks in which balances that exceed the FDIC coverage are held, any exposure to loss is believed to be minimal. Cash and cash equivalents also includes amounts in transit due from financial institutions related to credit card and debit card transactions, which generally settle within three business days from the original transaction. Supplemental Cash Flow Information The following table shows supplemental cash flow information: Year Ended December 31, (In Thousands) 2023 2022 2021 Net Cash Paid During the Year: Interest $ 15,973 $ 6,618 $ 991 Income Taxes $ 11,680 $ 5,498 $ 9,654 Accounts Receivable Accounts receivable consist primarily of receivables due from customers on lease agreements, corporate receivables incurred during the normal course of business (primarily for vendor consideration and third-party warranty providers) and franchisee obligations. Accounts receivable, net of allowances, consist of the following: December 31, (In Thousands) 2023 2022 Customers $ 8,737 $ 9,721 Corporate 23,660 20,597 Franchisee 7,385 7,873 $ 39,782 $ 38,191 The Company maintains an accounts receivable allowance for the Aaron's Business customer lease agreements, under which its policy is to record a provision for returns and uncollectible contractually due renewal payments based on historical payments experience, which is recognized as a reduction of lease revenues and fees within the consolidated statements of earnings. Other qualitative factors are considered in estimating the allowance, such as current and forecasted business trends. The Company writes off customer lease receivables for its Aaron's Business operations that are 60 days or more past due on pre-determined dates twice monthly. The Company writes off customer lease receivables for its BrandsMart Leasing operations that are 90 days or more past due on pre-determined dates twice monthly. The Company also maintains an allowance for outstanding franchisee accounts receivable. The Company's policy is to estimate future losses related to certain franchisees that are deemed to have a higher risk of non-payment and record an allowance for these estimated losses. The estimated allowance on franchisee accounts receivable includes consideration of the financial position of each franchisee and qualitative consideration of potential losses associated with uncertainties impacting the franchisee's ability to satisfy their obligations. Uncertainties include inflationary and other economic pressures in the c |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | ACQUISITIONS BrandsMart U.S.A. Acquisition On April 1, 2022, the Company completed the acquisition of BrandsMart U.S.A for a total consideration of $230 million in cash under the terms of the agreement and additional amounts for working capital adjustments and transaction related fees. Consideration transferred also included the off-market value associated with certain operating leases entered into in conjunction with the transaction, which is further described in the table below. Measurement period adjustments recorded during the year ended December 31, 2023 primarily relate to opening balance adjustments to certain asset and liability balances further illustrated in the table below: (In Thousands) Preliminary Amounts Recognized as of Acquisition Date 2023 Measurement Period Adjustments Final Amounts Recognized as of Acquisition Date Cash Consideration to BrandsMart U.S.A. $ 230,000 $ — $ 230,000 Acquired Cash 15,952 — 15,952 Estimated Excess Working Capital, net of Cash 35,599 — 35,599 Non-Cash Off-Market Lease Agreement 6,823 — 6,823 Aggregate Consideration Transferred 288,374 — 288,374 Total Purchase Consideration, Net of Cash Acquired $ 272,422 $ — $ 272,422 Estimated Fair Value of Identifiable Assets Acquired and Liabilities Assumed Accounts Receivable 4,310 — 4,310 Merchandise Inventories 124,064 173 124,237 Property, Plant and Equipment 22,053 (1,361) 20,692 Operating Lease Right-of-Use Assets 160,210 — 160,210 Other Intangibles 122,950 — 122,950 Prepaid Expenses and Other Assets 9,049 (80) 8,969 Total Identifiable Assets Acquired 442,636 (1,268) 441,368 Accounts Payable and Accrued Expenses 25,340 (2,050) 23,290 Customer Deposits and Advance Payments 25,332 1,822 27,154 Operating Lease Liabilities 158,712 — 158,712 Debt 15,540 — 15,540 Total Liabilities Assumed 224,924 (228) 224,696 Net Assets Acquired 217,712 (1,040) 216,672 Goodwill 54,710 1,040 55,750 Total Estimated Fair Value of Net Assets Acquired $ 272,422 $ — $ 272,422 Franchisee Acquisitions The Company acquired the store operations of various Aaron's franchisees during the year ended December 31, 2021, for a combined purchase price of $10.6 million. The franchisee acquisitions have been accounted for as business combinations and the results of operations of the acquired businesses are included in the Company’s results of operations from their dates of acquisition. The primary tangible asset acquired as part of these transactions was lease merchandise and the primary intangible assets allocated to were reacquired franchise rights and customer lease contracts during the year ended December 31, 2021. As a result of these business combinations, the Company recorded $5.6 million in goodwill during the year ended December 31, 2021. The effect of these acquisitions on the consolidated financial statements for the years ended December 31, 2023, 2022 and 2021 was not significant. There were no material measurement period adjustments recognized in 2023 or 2022 related to the 2021 franchisee acquisitions and there were no franchise acquisitions in 2023 or 2022. |
Goodwill and Intangibles
Goodwill and Intangibles | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangibles | GOODWILL AND INTANGIBLES Goodwill Goodwill represents the excess of the purchase price over the fair value of the identifiable net tangible and intangible assets acquired in connection with business acquisitions. All acquisition-related goodwill balances are allocated amongst the Company's reporting units based on the nature of the acquired operations that originally created the goodwill and are comprised of the following: (i) Aaron’s Business (a component of the Aaron’s Business operating segment) • Aaron’s branded Company-operated and franchise operated stores, • Aarons.com e-commerce platform ("aarons.com") and, • Woodhaven (ii) BrandsMart Leasing (a component of the Aaron’s Business operating segment) (iii) BrandsMart (the sole component of the BrandsMart operating segment) Management considered the aggregation of the BrandsMart Leasing reporting unit and Aaron's Business reporting unit as a single reporting unit and determined that these components were economically dissimilar and reviewed separately by the segment managers of the Aaron's Business operating segment, and therefore should not be aggregated. The Company’s goodwill is not amortized but is subject to an impairment test at the reporting unit level annually as of October 1 and more frequently if events or circumstances indicate that an impairment may have occurred. An interim goodwill impairment test is required if the Company believes it is more likely than not that the carrying amount of its reporting unit exceeds the reporting unit's fair value. The Company concluded that the need for an interim goodwill impairment test was triggered as of August 31, 2022. Factors that led to this conclusion included: (i) the continued decline in the Company's stock price and market capitalization during the third quarter of 2022, (ii) uncertainty regarding the short-term and long-term impacts that adverse macroeconomic conditions, including inflation and rising interest rates, may have on the financial health of our Aaron's Business customers and franchisees. The Company determined that the Aaron’s Business Reporting Unit’s goodwill was fully impaired and recorded a goodwill impairment charge of $12.9 million during the quarter ended September 30, 2022. The Company concluded that given the recency of the BrandsMart acquisition, the provisional nature of the goodwill balance, the carrying value of our acquisition accounting as preliminary and subject to adjustment during the measurement period, the BrandsMart reporting unit goodwill was not impaired as of September 30, 2022. The Company also performed its annual goodwill impairment test on the remaining goodwill balance allocated to BrandsMart Leasing and BrandsMart reporting units as of its annual testing dates, October 1, 2022, and 2023, respectively, and determined that no impairment had occurred and that the fair value of the reporting units were in excess of their carrying amounts. The Company also determined that there were no events that occurred or circumstances that changed during the fourth quarter of 2023 that would more likely than not reduce the fair value of the reporting units below their carrying amounts. Management engaged the assistance of a third-party valuation firm to perform the goodwill impairment tests mentioned above. This entailed assessments of the Aaron's Business, BrandsMart, and BrandsMart Leasing reporting units' fair values relative to their respective carrying values that were derived using a combination of both income and market approaches and by performing a market capitalization reconciliation, which included assessments of the control premiums implied from the Company's estimated fair values of its reporting units. The fair value measurements involved significant unobservable inputs (Level 3 inputs, as discussed more fully below). The income approaches utilized the discounted future expected cash flows, which required assumptions about short-term and long-term revenue growth or decline rates, operating margins, capital requirements, and a weighted-average cost of capital. The market approaches, which includes the guideline public company methods, utilized pricing multiples derived from an analyses of comparable publicly traded companies. We believe the comparable companies we evaluate as marketplace participants serve as an appropriate reference when calculating fair value because those companies have similar risks, participate in similar markets, provide similar products and services for their customers, and compete with us directly. The following table provides information related to the carrying amount of the Company’s goodwill: (In Thousands) Aaron's Business BrandsMart BrandsMart Leasing Total Balance at January 1, 2022 $ 13,134 $ — $ — $ 13,134 Acquisitions — 62,268 — 62,268 Currency Translation Adjustments (94) — — (94) Acquisition Accounting Adjustments (107) (34,075) 26,517 (7,665) Impairment Loss (12,933) — — (12,933) Balance at December 31, 2022 $ — $ 28,193 $ 26,517 $ 54,710 Acquisitions — — — — Currency Translation Adjustments — — — — Acquisition Accounting Adjustments — 1,040 — 1,040 Balance at December 31, 2023 $ — $ 29,233 $ 26,517 $ 55,750 Definite-Lived Intangible Assets The following table summarizes information related to the Company's definite-lived intangible assets at December 31 : 2023 2022 (In Thousands) Gross Accumulated Net Gross Accumulated Net Customer Relationships $ 209 $ (164) $ 45 $ 696 $ (455) $ 241 Reacquired Franchise Rights 4,122 (2,976) 1,146 5,440 (3,539) 1,901 Non-Compete Agreements 256 (152) 104 320 (111) 209 Expanded Customer Base 862 (818) 44 1,440 (1,157) 283 Trade Names 108,000 (9,450) 98,550 108,000 (4,050) 103,950 Customer List 14,700 (6,431) 8,269 14,700 (2,756) 11,944 Total $ 128,149 $ (19,991) $ 108,158 $ 130,596 $ (12,068) $ 118,528 The Company's definite-lived intangible assets were acquired in connection with store-based business acquisitions, asset acquisitions of customer contracts, franchisee acquisitions, and the BrandsMart U.S.A. acquisition. The customer relationship intangible asset is amortized on a straight-line basis over a three-year estimated useful life. Reacquired franchise rights are amortized on a straight-line basis over the remaining life of the franchisee’s ten-year license term. The non-compete intangible asset is amortized on a straight-line basis over the life of the agreement (generally one two Total amortization expense of the Company's definite-lived intangible assets included in other operating expenses, net in the accompanying consolidated statements of earnings was $10.3 million, $9.3 million and $5.5 million during the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, estimated future amortization expense for the next five years related to the Company's definite-lived intangible assets is as follows: (In Thousands) 2024 $ 9,776 2025 9,489 2026 6,512 2027 5,432 2028 5,400 |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | FAIR VALUE MEASUREMENT Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table summarizes financial liabilities measured at fair value on a recurring basis: December 31, 2023 December 31, 2022 (In Thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Deferred Compensation Liability $ — $ (10,574) $ — $ — $ (8,621) $ — Interest Rate Swap Liability $ — $ (468) $ — $ — $ — $ — The Company maintains The Aaron's Company, Inc. Deferred Compensation Plan, which is an unfunded, nonqualified deferred compensation plan for a select group of management, highly compensated employees and non-employee directors. The liability represents benefits accrued for plan participants and is valued at the quoted market prices of the participants’ investment elections, which consist of equity and debt "mirror" funds. As such, the Company has classified the deferred compensation liability as a Level 2 liability, which is recorded in accounts payable and accrued expenses in the consolidated balance sheets. In March 2023, the Company entered into an interest rate swap agreement for an aggregate notional amount of $100.0 million which is further described in Note 1 to these consolidated financial statements. The fair value of the interest rate swap agreement is derived by using widely accepted valuation techniques and reflects the contractual terms of the interest rate swap including the period to maturity and uses observable market-based inputs, including interest rate curves. The fair value associated with the interest rate swap is recorded within prepaid expenses and other assets (when the resulting fair value is an asset) or accounts payable and accrued expenses (when the resulting fair value is a liability) within the Company's consolidated balance sheets. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | PROPERTY, PLANT, AND EQUIPMENT The following is a summary of the Company’s property, plant, and equipment: December 31 (In Thousands) 2023 2022 Land $ 10,043 $ 11,740 Buildings and Improvements 44,013 43,309 Leasehold Improvements and Signs 155,912 134,312 Vehicles 103,067 96,543 Fixtures and Equipment 102,848 105,362 Software - Internal Use 164,262 143,091 Construction in Progress 8,212 15,080 588,357 549,437 Less: Accumulated Depreciation and Amortization 1 (318,524) (281,980) $ 269,833 $ 267,457 1 Includes accumulated amortization of internal-use software development costs which amounted to $113.6 million and $93.4 million as of December 31, 2023 and 2022, respectively. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | REVENUE RECOGNITION The following table disaggregates revenue by source: Year Ended December 31, (In Thousands) 2023 2022 2021 Lease Revenues and Fees $ 1,399,514 $ 1,529,125 $ 1,633,489 Retail Sales 620,665 585,624 57,568 Non-Retail Sales 96,710 110,531 128,299 Franchise Royalties and Fees 22,312 23,376 25,129 Other 689 778 1,019 Total 1 $ 2,139,890 $ 2,249,434 $ 1,845,504 1 Includes revenues from Canadian operations of $17.2 million, $18.6 million and $22.7 million during the years ended December 31, 2023, 2022, and 2021, which are primarily lease revenues and fees. Lease Revenues and Fees The Aaron's Business segment, which includes BrandsMart Leasing, provides lease merchandise, consisting of furniture, appliances, electronics, computers, and other home goods to their customers for lease under certain terms agreed to by the customer. The Aaron's Business segment offers leases with flexible ownership plans that can be generally renewed weekly, bi-weekly, semi-monthly, or monthly up to 12, 18 or 24 months and does not require deposits upon inception of customer agreements. The customer has the right to acquire ownership either through an early purchase option or through payment of all required lease payments through the end of the ownership plan. Aaron's also offers customers the option to obtain a membership in the Aaron’s Club program. The benefits to customers of the Aaron's Club program are separated into three general categories: (a) lease protection benefits; (b) health & wellness discounts; and (c) dining, shopping and consumer savings. Lease agreements offered by the Aaron's Business segment including the Aaron's Club program memberships and BrandsMart Leasing, are cancellable at any time by either party without penalty, and as such, these offerings are renewable period to period arrangements. Lease revenues related to the leasing of merchandise and Aaron's Club membership fees are recognized as revenue in the month they are earned. Payments received prior to the month earned are recorded as deferred lease revenue, and this amount is included in customer deposits and advance payments in the accompanying consolidated balance sheets. Substantially all of the prior year deferred lease revenue was recognized in the current year according to lease terms. Lease payments due but not received prior to month end are recorded as accounts receivable in the accompanying consolidated balance sheets. Lease revenues are recorded net of a provision for returns and uncollectible renewal payments. All of Aaron's customer lease agreements, including BrandsMart Leasing, are considered operating leases. The Company maintains ownership of the lease merchandise until all payment obligations are satisfied under lease agreements. Initial direct costs related to customer agreements are expensed as incurred and have been classified as other operating expenses, net in the accompanying consolidated statements of earnings. The consolidated statements of earnings effects of expensing the initial direct costs as incurred are not materially different from amortizing initial direct costs over the lease ownership plan. Substantially all lease revenues and fees were within the scope of ASC 842, Leases , during the years ended December 31, 2023, 2022, and 2021. Included in lease revenues and fees above, the Company had $24.8 million, $27.2 million and $27.3 million of other revenue during the years ended December 31, 2023, 2022, and 2021, respectively, within the scope of ASC 606, Revenue from Contracts with Customers, which is included in lease revenues and fees above in the accompanying consolidated statements of earnings. Retail Sales All retail sales revenue is within the scope of ASC 606, Revenue from Contracts with Customers, during the years ended December 31, 2023, 2022 and 2021. Aaron's Business Revenues from the retail sale of lease merchandise to individual consumers are recognized at the point of sale and are recorded within retail sales in the accompanying consolidated statements of earnings. Generally, the transfer of control occurs near or at the point of sale for retail sales. Aaron's Business retail sales are not subject to a returns policy. All retail sales revenue is within the scope of ASC 606, Revenue from Contracts with Customers, during the years ended December 31, 2023, 2022 and 2021. BrandsMart Revenues from the retail sale of merchandise inventories are recorded within retail sales in the accompanying consolidated statements of earnings and are recognized at a point in time that the Company has satisfied its performance obligation and transferred control of the product to the respective customer. Revenues associated with retail sales transactions for which control has not transferred are deferred and are recorded within customer deposits and advance payments within the accompanying consolidated balance sheets. Substantially all of the prior year deferred retail sales were recognized in the current year. Retails sales at the BrandsMart segment, both in store and online, are subject to the segment's 30-day return policy. Accordingly, an allowance, based on historical returns experience, for sales returns is recorded as a component of retail sales in the period in which the related sales are recorded as well as an asset for the returned merchandise. The return asset and allowance for sales returns was $2.5 million and $3.4 million as of December 31, 2023 and $3.0 million and $4.0 million as of December 31, 2022, respectively. The return asset and allowance for sales returns was recorded within prepaid and other assets and accounts payable and accrued expenses within the accompanying consolidated balance sheets, respectively. Additional protection plans can be purchased by BrandsMart U.S.A. customers that provides extended warranty coverage on their product purchases, with payment being due for this protection at the point of sale. A third-party underwriter assumes the risk associated with the coverage and is primarily responsible for fulfillment. The Company is an agent to the contract and records the fixed commissions. These fixed commissions on the warranty coverages are included within retail sales in the accompanying consolidated statements of earnings on a net basis. Non-Retail Sales Revenues for the non-retail sale of merchandise to Aaron's franchisees are recognized when control transfers to the franchisee, which is upon delivery of the merchandise and are recorded within non-retail sales in the accompanying statements of earnings. All non-retail sales revenue is within the scope of ASC 606, Revenue from Contracts with Customers, during the years ended December 31, 2023, 2022 and 2021. Franchise Royalties and Fees We have existing agreements with our current Aaron's franchisees to govern the operations of franchised stores. Our standard agreement is for a term of ten years, with one ten-year renewal option. Franchisees are obligated to remit to us royalty payments of 6% of the weekly cash revenue payments received, which is recognized as the fees become due. The Company guarantees certain debt obligations of some of the franchisees and receives guarantee fees based on the outstanding debt obligations of such franchisees. Refer to Note 10 to these consolidated financial statements for additional discussion of the franchise-related guarantee obligation. The Company also charges fees for advertising efforts that benefit the franchisees, which are recognized at the time the advertising takes place. Substantially all franchise royalties and fee revenue is within the scope of ASC 606, Revenue from Contracts with Customers . Of the franchise royalties and fees, $17.8 million, $18.6 million and $19.8 million during the years ended December 31, 2023, 2022 and 2021 respectively, is related to franchise royalty income that is recognized as the fees become due. The remaining revenue is primarily related to advertising fees charged to franchisees. Franchise royalties and fees are recorded within franchise royalties and other revenues in the accompanying consolidated statements of earnings. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Leases | LEASES Lessor Information Refer to Note 6 to these consolidated financial statements for further information about the Company's revenue generating activities as a lessor. All of the Company's customer lease agreements are considered operating leases, and the Company currently does not have any sales-type or direct financing leases. Lessee Information The Company leases retail store and warehouse space for most of its store-based operations, as well as corporate office space for store and e-commerce supporting functions (collectively "real estate leases"), transportation vehicles, and office equipment under operating leases expiring at various times through 2038. The Company does not record lease liability or right-of-use assets for any leases that have a lease term of under 12 months or less at commencement. For all leases in which it is a lessee, the Company has elected to include both lease and non-lease components as a single component and account for it as a lease. Operating lease costs are recorded on a straight-line basis and are primarily classified within other operating expenses, net in the consolidated statements of earnings. Real Estate Leases Most of the Company’s real estate leases contain renewal options for additional periods ranging from one Residual Value Guarantees Real estate and office equipment leases do not contain any material residual value guarantees; however, vehicle leases include a residual value that is guaranteed to the lessor, which ensures that the vehicles will be returned to the lessor in reasonable working condition. Other Lease Information The Company did not have any finance lease costs in 2023 or 2022. In 2021, finance lease costs and their associated cash flow impacts were immaterial. The Company’s total operating lease costs are comprised of the following: Year Ended December 31, (In Thousands) 2023 2022 2021 Operating Lease cost: Non-Cash Lease Expense classified within Other Operating Expenses, Net 1 118,759 111,452 91,467 Non-Cash Lease Expense classified within Restructuring Expenses, Net 2 851 1,161 1,616 Sublease Receipts 3 (1,663) (2,090) (2,442) Total Operating Lease cost $ 117,947 $ 110,523 $ 90,641 1 Includes short-term and variable lease costs, which are not significant. Short-term lease expense include lease terms of greater than one month, but not greater than 12 months. 2 Excludes right-of-use asset impairment charges of $3.1 million, $11.2 million and $4.2 million recognized during the years ended December 31, 2023, 2022 and 2021, respectively, which were recognized within restructuring expenses, net in the consolidated statements of earnings and within impairment of assets in the consolidated statements of cash flows. 3 The Company has anticipated future sublease receipts from executed sublease agreements of $1.2 million in 2024, $0.9 million in 2025, $0.5 million in 2026, $0.1 million in 2027, $0.1 million in 2028, and $0.1 million thereafter. Additional information regarding the Company’s leasing activities is as follows: Year Ended December 31, (In Thousands) 2023 2022 2021 Cash paid for amounts included in measurement of Operating Lease Liabilities 130,221 130,273 111,555 Right-of-Use Assets obtained in exchange for new Operating Lease Liabilities 1 $ 114,564 $ 294,109 $ 133,528 1 During the year ended December 31, 2022, $160.2 million of the right-of-use assets obtained in exchange for new operating lease liabilities relates to the acquisition of BrandsMart U.S.A. The carrying value of these right-of-use assets was subsequently reduced by the $6.8 million value of the off-market element of the BrandsMart U.S.A. lease agreements, which is reflected in the amounts noted in the table above. The Company uses its incremental borrowing rate as the discount rate for its leases, as the implicit rate in the lease is not readily determinable. Below is a summary of the weighted-average discount rate and weighted-average remaining lease term for operating leases: December 31, 2023 2022 Weighted Average Discount Rate 1 Weighted Average Remaining Lease Term (in years) Weighted Average Discount Rate Weighted Average Remaining Lease Term (in years) Operating Leases 4.7 % 6.0 4.1 % 6.3 The table below is a summary of undiscounted operating lease liabilities that have terms in excess of one year and reconciles to the present value of the operating lease liabilities included in the consolidated balance sheets as of December 31, 2023. (In Thousands) Total 2024 $ 119,504 2025 110,368 2026 91,546 2027 77,169 2028 56,777 Thereafter 124,852 Total Future Undiscounted Cash Flows 1 580,216 Less: Interest 77,524 Present Value of Lease Liabilities $ 502,692 1 Future undiscounted cash flows do not include $6.0 million of future operating lease payments for leases that have not yet commenced. These leases will commence during 2024. Sale-Leaseback Transactions The Company entered into one and four sale and leaseback transactions during the years ended December 31, 2023, and 2022, respectively. The 2023 transaction related to five Company-owned Aaron’s store properties and the 2022 transactions related to a total of seven Company-owned Aaron’s store properties. Net proceeds from the sales were $9.1 million and $12.9 million, respectively. Proceeds are presented within proceeds from dispositions of property, plant, and equipment in the consolidated statement of cash flows. The Company recognized gains of $5.4 million in 2023 and $8.5 million in 2022, which were classified within other operating expenses, net in the consolidated statements of earnings. |
Leases | LEASES Lessor Information Refer to Note 6 to these consolidated financial statements for further information about the Company's revenue generating activities as a lessor. All of the Company's customer lease agreements are considered operating leases, and the Company currently does not have any sales-type or direct financing leases. Lessee Information The Company leases retail store and warehouse space for most of its store-based operations, as well as corporate office space for store and e-commerce supporting functions (collectively "real estate leases"), transportation vehicles, and office equipment under operating leases expiring at various times through 2038. The Company does not record lease liability or right-of-use assets for any leases that have a lease term of under 12 months or less at commencement. For all leases in which it is a lessee, the Company has elected to include both lease and non-lease components as a single component and account for it as a lease. Operating lease costs are recorded on a straight-line basis and are primarily classified within other operating expenses, net in the consolidated statements of earnings. Real Estate Leases Most of the Company’s real estate leases contain renewal options for additional periods ranging from one Residual Value Guarantees Real estate and office equipment leases do not contain any material residual value guarantees; however, vehicle leases include a residual value that is guaranteed to the lessor, which ensures that the vehicles will be returned to the lessor in reasonable working condition. Other Lease Information The Company did not have any finance lease costs in 2023 or 2022. In 2021, finance lease costs and their associated cash flow impacts were immaterial. The Company’s total operating lease costs are comprised of the following: Year Ended December 31, (In Thousands) 2023 2022 2021 Operating Lease cost: Non-Cash Lease Expense classified within Other Operating Expenses, Net 1 118,759 111,452 91,467 Non-Cash Lease Expense classified within Restructuring Expenses, Net 2 851 1,161 1,616 Sublease Receipts 3 (1,663) (2,090) (2,442) Total Operating Lease cost $ 117,947 $ 110,523 $ 90,641 1 Includes short-term and variable lease costs, which are not significant. Short-term lease expense include lease terms of greater than one month, but not greater than 12 months. 2 Excludes right-of-use asset impairment charges of $3.1 million, $11.2 million and $4.2 million recognized during the years ended December 31, 2023, 2022 and 2021, respectively, which were recognized within restructuring expenses, net in the consolidated statements of earnings and within impairment of assets in the consolidated statements of cash flows. 3 The Company has anticipated future sublease receipts from executed sublease agreements of $1.2 million in 2024, $0.9 million in 2025, $0.5 million in 2026, $0.1 million in 2027, $0.1 million in 2028, and $0.1 million thereafter. Additional information regarding the Company’s leasing activities is as follows: Year Ended December 31, (In Thousands) 2023 2022 2021 Cash paid for amounts included in measurement of Operating Lease Liabilities 130,221 130,273 111,555 Right-of-Use Assets obtained in exchange for new Operating Lease Liabilities 1 $ 114,564 $ 294,109 $ 133,528 1 During the year ended December 31, 2022, $160.2 million of the right-of-use assets obtained in exchange for new operating lease liabilities relates to the acquisition of BrandsMart U.S.A. The carrying value of these right-of-use assets was subsequently reduced by the $6.8 million value of the off-market element of the BrandsMart U.S.A. lease agreements, which is reflected in the amounts noted in the table above. The Company uses its incremental borrowing rate as the discount rate for its leases, as the implicit rate in the lease is not readily determinable. Below is a summary of the weighted-average discount rate and weighted-average remaining lease term for operating leases: December 31, 2023 2022 Weighted Average Discount Rate 1 Weighted Average Remaining Lease Term (in years) Weighted Average Discount Rate Weighted Average Remaining Lease Term (in years) Operating Leases 4.7 % 6.0 4.1 % 6.3 The table below is a summary of undiscounted operating lease liabilities that have terms in excess of one year and reconciles to the present value of the operating lease liabilities included in the consolidated balance sheets as of December 31, 2023. (In Thousands) Total 2024 $ 119,504 2025 110,368 2026 91,546 2027 77,169 2028 56,777 Thereafter 124,852 Total Future Undiscounted Cash Flows 1 580,216 Less: Interest 77,524 Present Value of Lease Liabilities $ 502,692 1 Future undiscounted cash flows do not include $6.0 million of future operating lease payments for leases that have not yet commenced. These leases will commence during 2024. Sale-Leaseback Transactions The Company entered into one and four sale and leaseback transactions during the years ended December 31, 2023, and 2022, respectively. The 2023 transaction related to five Company-owned Aaron’s store properties and the 2022 transactions related to a total of seven Company-owned Aaron’s store properties. Net proceeds from the sales were $9.1 million and $12.9 million, respectively. Proceeds are presented within proceeds from dispositions of property, plant, and equipment in the consolidated statement of cash flows. The Company recognized gains of $5.4 million in 2023 and $8.5 million in 2022, which were classified within other operating expenses, net in the consolidated statements of earnings. |
Indebtedness
Indebtedness | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Indebtedness | INDEBTEDNESS The following is a summary of the Company’s debt, net of applicable unamortized debt issuance costs: (In Thousands) December 31, 2023 December 31, 2022 Revolving Facility $ 25,000 $ 69,250 Term Loan, Due in Installments through April 2027 1 168,963 173,163 Total Outstanding Borrowings under the Credit Facility 193,963 242,413 Total Debt 193,963 242,413 Less: Current Maturities 6,388 23,450 Long-Term Debt $ 187,575 $ 218,963 1 Includes unamortized debt issuance costs of $0.6 million and $0.7 million at December 31, 2023 and December 31, 2022. The Company has included $2.2 million and $2.9 million of debt issuance costs as of December 31, 2023 and December 31, 2022, respectively, related to the revolving credit facility within prepaid expenses and other assets in the consolidated balance sheets. Revolving Credit Facility and Term Loan To finance the BrandsMart U.S.A. acquisition, on April 1, 2022 the Company entered into a new unsecured credit facility (the "Credit Facility") which replaced its previous $250 million unsecured credit facility. The Credit Facility provides for a $175 million term loan (the "Term Loan") and a $375 million revolving credit facility (the "Revolving Facility"), which includes (i) a $35 million sublimit for the issuance of letters of credit on customary terms, and (ii) a $35 million sublimit for swing line loans on customary terms. The Company pays a commitment fee on unused balances related to the revolving facility, which ranges from 0.20% to 0.30% as determined by the Company's ratio of total net debt to EBITDA (as defined by the agreement). All borrowings for swing line loans under the Revolving Facility are short-term in nature. The weighted average interest rate on the outstanding short-term borrowings as of December 31, 2023, under the Revolving Facility was 7.08%. On April 1, 2022, the Company borrowed $175 million under the Term Loan and $117 million under the Revolving Facility to finance the purchase price for the BrandsMart U.S.A. acquisition and other customary acquisition and financing-related closing costs and adjustments. The Company expects that future additional borrowings under the Revolving Facility will be used to provide for working capital and capital expenditures, to finance future permitted acquisitions and for other general corporate purposes. As of December 31, 2023, $169.5 million and $25.0 million remained outstanding under the Term Loan and Revolving Facility, respectively, compared to $173.9 million and $69.3 million outstanding at December 31, 2022. Borrowings under the Revolving Facility and the Term Loan bear interest at a rate per annum equal to, at the option of the Company, (i) the forward-looking term rate based on SOFR plus an applicable margin ranging between 1.50% and 2.25%, based on the Company's Total Net Debt to EBITDA Ratio, or (ii) the base rate (as defined in the Credit Facility) plus an applicable margin, which is 1.00% lower than the applicable margin for SOFR loans. The loans and commitments under the Revolving Facility mature or terminate on April 1, 2027. The Term Loan amortizes in quarterly installments, commencing on December 31, 2022, in an aggregate annual amount equal to (i) 2.50% of the original principal amount of the Term Loan during the first and second years after the closing date, (ii) 5.00% of the original principal amount of the Term Loan during the third, fourth and fifth years after the closing date, with the remaining principal balance of the Term Loan to be due and payable in full on April 1, 2027. On February 23, 2024, the Company amended its revolving credit and term loan agreement (the "Credit Facility") to, among other things: (i) decrease the Revolving Facility commitment from $375 million to $275 million, (ii) include a Security Agreement consisting of a first priority lien (subject to Permitted Liens) on certain agreed upon assets of the Borrower and Guarantors, including a pledge of the capital stock of all existing and future Material Subsidiaries of Holdings and excluding Real Property, and (iii) amend the existing Fixed Charge Coverage Ratio to lower the required minimum threshold. Franchise Loan Facility Amendment On April 1, 2022, the Company also entered into a new $12.5 million unsecured franchise loan facility (the "Franchise Loan Facility"), which replaced its previous $15.0 million amended and restated unsecured franchise loan facility dated as of November 10, 2021. The Franchise Loan Facility operates as a guarantee by the Company of certain debt obligations of certain Aaron's franchisees (the "Borrower") under a franchise loan program. In the event these franchisees are unable to meet their debt service payments or otherwise experience an event of default, the Company would be unconditionally liable for the outstanding balance of the franchisees’ debt obligations under the Franchise Loan Facility, which would be due in full within 90 days of such event of default. Borrowings under the Franchise Loan Facility bear interest at a rate per annum equal to SOFR plus an applicable margin ranging between 1.50% and 2.25%, based on the Company's Total Net Debt to EBITDA Ratio (as defined in the Franchise Loan Facility). The Franchise Loan Facility is available for a period of 364 days commencing on April 1, 2022, and permits the Borrower to request extensions for additional 364-day periods. As of December 31, 2023, the Franchise Loan Facility has a total commitment amount of $10.0 million and a maturity date of March 30, 2024, due to amendments executed in 2023. On February 23, 2024, the Company amended its Franchise Loan Facility to conform to the changes resulting from the amendment to its Credit Facility (described above), and to extend the maturity date to March 29, 2025. Financial Covenants The Credit Facility and the Franchise Loan Facility contain customary financial covenants including (a) a maximum Total Net Debt to EBITDA Ratio of 2.75 to 1.00 and (b) a minimum Fixed Charge Coverage Ratio of 1.75 to 1.00. If the Company fails to comply with these covenants, the Company will be in default under these agreements, and all borrowings outstanding could become due immediately. Under the Credit Facility and Franchise Loan Facility, the Company may pay cash dividends in any year so long as, after giving pro forma effect to the dividend payment, the Company maintains compliance with its financial covenants and no event of default has occurred or would result from the payment. The Company is in compliance with all of these covenants at December 31, 2023. The table below shows all scheduled maturities for borrowings outstanding under the Revolving Facility and Term Loan as of December 31, 2023: (In Thousands) Total 2024 $ 6,388 2025 8,575 2026 8,575 2027 1 170,425 Total $ 193,963 1 Amount includes $25.0 million of outstanding borrowings under the Revolving Facility as of December 31, 2023. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES On April 1, 2022, the Company acquired BrandsMart U.S.A. in a deemed asset acquisition for federal and state income tax purposes. Due to the early adoption of ASU 2021-08, the Company recorded a deferred tax asset of $1.1 million related to the assumed acquisition date fair value of deferred revenue with an offsetting reduction to goodwill. No additional deferred tax assets or liabilities were recorded as part of business combination accounting. The following is a summary of the Company’s income tax (benefit) expense: Year Ended December 31, (In Thousands) 2023 2022 2021 Current Income Tax (Benefit) Expense Federal $ 3,697 $ 152 $ 140 State 3,786 2,988 6,073 Foreign (162) (131) 998 7,321 3,009 7,211 Deferred Income Tax (Benefit) Expense: Federal (3,411) (4,417) 28,505 State (8,067) (8,074) 172 Foreign 276 19 48 (11,202) (12,472) 28,725 Income Tax (Benefit) Expense $ (3,881) $ (9,463) $ 35,936 Significant components of the Company’s deferred income tax liabilities and assets are as follows: December 31, (In Thousands) 2023 2022 Deferred Tax Liabilities: Lease Merchandise and Property, Plant and Equipment $ 151,687 $ 182,070 Operating Lease Right-of-Use Assets 116,372 114,868 Prepaid Expenses 4,578 5,412 Other, Net 5,476 5,697 Total Deferred Tax Liabilities 278,113 308,047 Deferred Tax Assets: Goodwill and Other Intangibles 49,104 55,733 Accrued Liabilities 16,893 16,614 Advance Payments 11,812 12,913 Operating Lease Liabilities 126,437 125,056 Net Operating Loss 8,207 15,436 Stock-Based Compensation 3,364 3,695 263A Inventory Capitalization 2,028 2,018 Other Comprehensive Income 449 — Other, Net 1,151 5,851 Total Deferred Tax Assets 219,445 237,316 Less Valuation Allowance 412 — Net Deferred Tax Liabilities $ 59,080 $ 70,731 Activity in the Company's deferred tax asset valuation allowance is as follows: Year Ended (In Thousands) December 31, 2023 December 31, 2022 Beginning Balance $ — $ — Valuation allowance provided for taxes related to: State net operating loss carryforwards 412 — Ending Balance $ 412 $ — The Company’s effective tax rate differs from the statutory United States federal income tax rate as follows: Year Ended December 31, 2023 2022 2021 Statutory Rate 21.0 % 21.0 % 21.0 % Increases (Decreases) in United States Federal Taxes Resulting From: State Income Taxes, net of Federal Income Tax Benefit (38.9) 1.5 3.7 Nondeductible Officers Compensation (36.6) (9.1) 0.3 Permanent Differences (60.6) (2.0) 0.4 Remeasurement of net Deferred Tax Liabilities 504.6 34.1 0.2 Federal Tax Credits 125.2 15.1 (1.6) Stock-Based Compensation - Tax Deficiency (89.2) (1.6) 0.1 Valuation Allowance (39.0) — — Other, net (19.7) 5.2 0.5 Effective Tax Rate 366.8 % 64.2 % 24.6 % The net income tax benefit recognized in 2022 includes a $5.1 million deferred income tax benefit generated by the remeasurement of state deferred tax assets and liabilities in connection with the acquisition of BrandsMart U.S.A. The net income tax benefit recognized in 2023 includes a $5.3 million deferred income tax benefit generated by the remeasurement of state deferred tax assets and liabilities in connection with an election to file a consolidated state income tax return and a change in the expected state apportionment percentages related to an election to treat Aaron's, LLC, a subsidiary of the Company, as a corporation for income tax purposes effective January 1, 2023. At December 31, 2023, the Company had $0.2 million of federal tax credit carryforwards which will begin to expire in 2031. In addition, at December 31, 2023, the Company had $8.2 million of tax-effected state net operating loss carryforwards which will begin to expire in 2027 and state tax credit carryforwards of $0.8 million which will begin to expire in 2031. A valuation allowance has been provided where it is more likely than not that deferred tax assets related to state net operating loss carryforwards will not be realized. As of December 31, 2023, the valuation allowance totaled $0.4 million for state net operating loss carryforwards. The Company files a federal income tax return in the United States and files in various state and foreign jurisdictions. The Company filed its initial U.S. federal income tax return for the year ended December 31, 2020; currently, there are no open IRS examinations. With few exceptions, the Company is no longer subject to foreign and state and local tax examinations by tax authorities for years before 2020. The following table summarizes the activity related to the Company’s uncertain tax positions: Year Ended December 31, (In Thousands) 2023 2022 2021 Balance at January 1, $ 439 $ 470 $ 683 Additions Based on Tax Positions Related to the Current Year — — — Additions for Tax Positions of Prior Years 281 109 — Prior Year Reductions — — (104) Statute Expirations (154) (140) (109) Settlements — — — Amounts Transferred to Former Parent — — — Balance at December 31, $ 566 $ 439 $ 470 As of December 31, 2023, 2022 and 2021, the amount of uncertain tax benefits that, if recognized, would affect the effective tax rate is $0.7 million, $0.5 million and $0.5 million, respectively, including interest and penalties. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Guarantees The Company has guaranteed certain debt obligations of some of its Aaron's franchisees under a franchise loan program (the "Franchise Loan Facility") as described in further detail in Note 8 to these consolidated financial statements. The Company has recourse rights to franchisee assets securing the debt obligations, which consist primarily of lease merchandise and fixed assets. Since the inception of the franchise loan program in 1994, the Company's losses associated with the program have been insignificant. However, such losses could be significant in a future period due to potential adverse trends in the liquidity and/or financial performance of Aaron's franchisees resulting in an event of default or impending defaults by franchisees. The Company entered into a new Franchise Loan Facility agreement on April 1, 2022, which has been amended several times since that date. As of December 31, 2023, the Franchise Loan Facility has a total commitment amount of $10.0 million and a commitment termination date of March 30, 2024. On February 23, 2024, the Company amended its Franchise Loan Facility to conform to the changes resulting from the amendment to its Credit Facility (described above), and to extend the maturity date to March 29, 2025. At December 31, 2023, the maximum amount that the Company would be obligated to repay in the event franchisees defaulted was $4.9 million. The Company is subject to financial covenants under the Franchise Loan Facility as detailed in Note 8 to these consolidated financial statements. At December 31, 2023, the Company was in compliance with all covenants under the Franchise Loan Facility agreement. The Company records a liability related to estimated future losses from repaying the franchisees' outstanding debt obligations upon any possible future events of default. This liability is included in accounts payable and accrued expenses in the consolidated balance sheets and was $1.0 million and $1.3 million at December 31, 2023 and 2022, respectively. The balances at December 31, 2023 and 2022 included qualitative consideration of potential losses, associated with uncertainties impacting the operations and liquidity of our franchisees. Uncertainties include inflationary pressures in the current macroeconomic environment. Legal Proceedings From time to time, the Company is party to various legal and regulatory proceedings arising in the ordinary course of business, certain of which have been described below. The Company establishes an accrued liability for legal and regulatory proceedings when it determines that a loss is both probable and the amount of the loss can be reasonably estimated. The Company continually monitors its litigation and regulatory exposure and reviews the adequacy of its legal and regulatory reserves on a quarterly basis. The amount of any loss ultimately incurred in relation to matters for which an accrual has been established may be higher or lower than the amounts accrued for such matters due to the inherent uncertainty in litigation, regulatory and similar adversarial proceedings, and substantial losses from these proceedings or the costs of defending them could have a material adverse impact upon the Company’s business, financial position, and results of operations. At December 31, 2023 and 2022, the Company had accrued $0.7 million and $2.7 million, respectively, for pending legal and regulatory matters for which it believes losses are probable and is management’s best estimate of its exposure to loss. The Company records these liabilities in accounts payable and accrued expenses in the consolidated balance sheets. Those matters for which a loss is reasonably possible but not probable and those matters for which a reasonable estimate is not possible are not included within these estimated ranges and, therefore, the estimated ranges do not represent the Company’s maximum loss exposure. In Jacob Atkinson v. Aaron’s, LLC dba Aaron’s Sales & Lease Ownership, LLC , Civil Action No. 2:23-cv-01742-BJR (W.D. Wash.), filed on October 11, 2023, currently before the United States District Court for the Western District of Washington, plaintiff alleges that the Company violated Washington’s Equal Pay and Opportunity Act, RCW 49.58.110, because certain of the Company’s job postings did not include a wage scale or salary range. Because the statute is new, issues including standing, applicability as to who it covers, and the constitutionality of the statutory penalty have not been determined. Plaintiff seeks injunctive and declaratory relief and also seeks certification of a putative class. On January 22, 2024, the Company filed a motion to dismiss the lawsuit. The assessment as to whether a loss is probable or reasonably possible, and as to whether such loss or a range of such losses is estimable, often involves significant judgment about future events, and the outcome of litigation is inherently uncertain. Other than as described above, there is no material pending or threatened litigation against the Company that remains outstanding as of December 31, 2023. Other Contingencies At December 31, 2023, the Company had non-cancelable commitments primarily related to certain advertising and marketing programs, software licenses, and hardware and software maintenance of $18.0 million. Payments under these commitments are scheduled to be $11.3 million in 2024, $5.6 million in 2025 and $1.1 million in 2026. Management regularly assesses the Company’s insurance deductibles, monitors litigation and regulatory exposure with the Company’s attorneys, and evaluates its loss experience. The Company also enters into various contracts in the normal course of business that may subject it to risk of financial loss if counterparties fail to perform their contractual obligations. |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | RESTRUCTURING As management continues to execute on its long-term strategic plan, additional benefits and charges are expected to result from our restructuring programs. The extent of any future charges related to our restructuring programs are not currently estimable and depend on various factors including the timing and scope of future cost optimization initiatives. Operational Efficiency and Optimization Restructuring Program During the third quarter of 2022, the Company initiated the Operational Efficiency and Optimization Restructuring Program intended to strengthen operational efficiencies and reduce the Company’s overall costs. Management believes that this restructuring program will help the Company sharpen its operational focus, optimize its cost profile, allocate capital resources towards long-term strategic objectives, and generate incremental value for shareholders through investments in technological capabilities, and fulfillment center logistics competencies. Since initiation, the program resulted in the closure or consolidation of 38 Company-operated Aaron's stores through the year ended December 31, 2023. This program also includes the Hub and Showroom model to optimize labor in markets, store labor realignments, optimization of the Company's supply chain, the centralization and optimization of store support center, operations, and multi-unit store oversight functions, as well as other real estate and third party spend costs reductions. Total net restructuring expenses under the Operational Efficiency and Optimization Restructuring Program related to the initiatives described above were $6.4 million during the year ended December 31, 2023. Such expenses were recorded within the Unallocated Corporate category for segment reporting and were comprised mainly of professional advisory fees, severance, operating lease right-of-use asset impairment charges, fixed asset impairment charges and continuing variable occupancy costs incurred related to closed stores. Management expects future restructuring expenses (reversals) due to potential early buyouts of leases with landlords, as well as continuing variable occupancy costs related to closed stores. Since inception of the Operational Efficiency and Optimization Restructuring Program, the Company has incurred charges of $18.0 million under the plan. These cumulative charges are primarily comprised of operating lease right-of-use asset and fixed impairment charges, continuing variable occupancy costs incurred related to closed stores, professional advisory fees, and severance related to reductions in its store support center and Aaron's Business store oversight functions. In January 2024, the Company completed a headcount reduction of its store support center to more closely align with current business conditions resulting in the recognition of $2.1 million in severance charges. Real Estate Repositioning and Optimization Restructuring Program During the first quarter of 2020, the Company initiated a real estate repositioning and optimization restructuring program. This program includes a strategic plan to remodel, reposition, and consolidate our Company-operated Aaron's store footprint over the next two Total net restructuring expenses under the real estate repositioning and optimization restructuring program of $9.2 million were recorded for the year ended December 31, 2023. Restructuring expenses were recorded within the Unallocated Corporate category for segment reporting and were comprised mainly of operating lease right-of-use asset and fixed asset impairment charges related to the vacancy or planned vacancy of stores identified for closure. Since inception of the real estate repositioning and optimization program, the Company has incurred charges of $70.8 million under the plan. These cumulative charges are primarily comprised of operating lease right-of-use asset and fixed impairment charges, losses recognized related to contractual lease obligations, and severance related to reductions in store support center and field support staff headcount. We expect future restructuring expenses (reversals) due to potential future early buyouts of leases with landlords, as well as continuing variable occupancy costs related to closed stores. The following table summarizes restructuring charges incurred under the Company's restructuring programs: Year Ended December 31, (In Thousands) 2023 2022 2021 Right-of-Use Asset Impairment $ 3,121 $ 11,214 $ 4,162 Operating Lease Charges 7,129 7,150 4,827 Fixed Asset Impairment 967 5,032 658 Severance 2,096 3,137 262 Professional Advisory Fees 1,720 4,881 — Other Expenses 665 1,362 384 Gain on Sale of Store Properties (101) (59) (1,075) Total Restructuring Expenses, Net $ 15,597 $ 32,717 $ 9,218 The following table summarizes the corresponding accrual balances as of December 31, 2023 and December 31, 2022 for the restructuring programs: (In Thousands) Severance Operating Lease Charges 1 Professional Advisory Fees Balance at December 31, 2022 $ 695 $ 2,200 $ 1,032 Restructuring Charges $ 2,096 $ 2,016 $ 1,720 Payments $ (2,620) $ (3,367) $ (2,748) Balance at December 31, 2023 $ 171 $ 849 $ 4 |
Segments
Segments | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Segments | SEGMENTS Segment Reporting For all periods prior to April 1, 2022, the Company only had one operating and reportable segment. Effective as of April 1, 2022 and in connection with the acquisition of BrandsMart U.S.A., the Company updated its reportable segments to align the reportable segments with the current organizational structure and the operating results that the chief operating decision maker regularly reviews to analyze performance and allocate resources, which includes two operating and reportable segments: Aaron's Business and BrandsMart, along with an Unallocated Corporate category for remaining unallocated costs. The Aaron's Business segment provides consumers with LTO and retail purchase solutions through the Company's Aaron's stores, along with its franchisees, in the United States and Canada and the aarons.com e-commerce platform. In addition, the Aaron's Business segment includes the operations of BrandsMart Leasing, which offers a lease-to-own solution to customers of BrandsMart U.S.A., and Woodhaven, which manufactures and supplies a significant portion of the upholstered furniture leased and sold in Company-operated and franchised Aaron's stores. The BrandsMart segment includes the operations of BrandsMart U.S.A. (other than BrandsMart Leasing), which is one of the leading appliance and consumer electronics retailers in the southeastern United States and one of the largest appliance retailers in the country with 11 stores in Florida and Georgia and a growing e-commerce presence on brandsmartusa.com. The results of BrandsMart have been included in the Company's consolidated results from the April 1, 2022 acquisition date. Measurement of Segment Profit or Loss and Segment Assets The Company evaluates segment performance based primarily on revenues and earnings (loss) from operations before unallocated corporate costs, which are evaluated on a consolidated basis and not allocated to the Company's business segments. Intersegment sales between BrandsMart and the Aaron's Business pertaining to BrandsMart Leasing, are recognized at retail prices. Since the intersegment profit affects cost of goods sold, depreciation and lease merchandise valuation, they are adjusted when intersegment profit is eliminated in consolidation. The Company determines earnings (loss) before income taxes for all reportable segments in accordance with U.S. GAAP. Unallocated Corporate costs are presented separately and generally include unallocated costs associated with the following: equity-based compensation, interest income and expense, information security, executive compensation, legal and compliance, corporate governance, accounting and finance, human resources and other corporate functions. The Unallocated Corporate category also includes acquisition-related costs, restructuring charges and separation costs for which the individual operating segments are not being evaluated. The Company does not evaluate performance or allocate resources based on segment asset data, and therefore total segment assets are not presented. Year Ended December 31, 2023 (In Thousands) Aaron's Business BrandsMart Elimination of Intersegment Revenues Total Lease Revenues and Fees $ 1,399,514 $ — $ — $ 1,399,514 Retail Sales 27,248 604,413 (10,996) 620,665 Non-Retail Sales 96,710 — — 96,710 Franchise Royalties and Fees 22,312 — — 22,312 Other 689 — — 689 Total $ 1,546,473 $ 604,413 $ (10,996) $ 2,139,890 Year Ended December 31, 2023 (In Thousands) Aaron's Business 1 BrandsMart Unallocated Corporate 2 Elimination Total Gross Profit $ 976,547 $ 143,660 $ — $ (888) $ 1,119,319 Earnings (Loss) Before Income Taxes 99,041 (5,029) (94,416) (654) (1,058) Depreciation and Amortization 3 75,221 14,244 876 — 90,341 Capital Expenditures 75,497 13,195 5,723 — 94,415 1 Earnings before income taxes for the Aaron's Business segment during the year ended December 31, 2023 included gains of $5.4 million related to a sale and leaseback transaction for five Company-owned Aaron's store properties. 2 The loss before income taxes for the Unallocated Corporate category during the year ended December 31, 2023 was impacted by restructuring charges of $15.6 million, BrandsMart U.S.A. acquisition-related costs of $3.6 million and separation-related costs of $0.2 million. 3 Excludes depreciation of lease merchandise, which is not included in the chief operating decision maker's measure of depreciation and amortization. Year Ended December 31, 2022 (In Thousands) Aaron's Business BrandsMart Elimination of Intersegment Revenues Total Lease Revenues and Fees $ 1,529,125 $ — $ — $ 1,529,125 Retail Sales 39,693 552,465 (6,534) 585,624 Non-Retail Sales 110,531 — — 110,531 Franchise Royalties and Fees 23,376 — — 23,376 Other 778 — — 778 Total $ 1,703,503 $ 552,465 $ (6,534) $ 2,249,434 Year Ended December 31, 2022 (In Thousands) Aaron's Business 1 BrandsMart 2 Unallocated Corporate 3 Elimination Total Gross Profit $ 1,061,266 $ 101,364 $ — $ (857) $ 1,161,773 Earnings (Loss) Before Income Taxes 122,220 (11,171) (125,021) (771) (14,743) Depreciation and Amortization 4 74,333 10,520 1,230 — 86,083 Capital Expenditures 98,305 3,499 6,176 — 107,980 1 Earnings before income taxes for the Aaron's Business segment during the year ended December 31, 2022 included gains of $8.5 million related to sale and leaseback transactions for seven Company-owned Aaron's store properties. 2 The loss before income taxes for the BrandsMart segment during the year ended December 31, 2022 was impacted by a one-time, non-cash charge for a fair value adjustment to the acquired merchandise inventories of $23.1 million. 3 The loss before income taxes for the Unallocated Corporate category during the year ended December 31, 2022 was impacted by restructuring charges of $32.7 million, BrandsMart U.S.A. acquisition-related costs of $14.6 million, a goodwill impairment charge of $12.9 million to fully write-off the goodwill balance of the Aaron's Business reporting unit and separation-related costs of $1.2 million. 4 Excludes depreciation of lease merchandise, which is not included in the chief operating decision maker's measure of depreciation and amortization. Year Ended December 31, 2021 (In Thousands) Aaron's Business BrandsMart Elimination of Intersegment Revenues Total Lease Revenues and Fees $ 1,633,489 $ — $ — $ 1,633,489 Retail Sales 57,568 — — 57,568 Non-Retail Sales 128,299 — — 128,299 Franchise Royalties and Fees 25,129 — — 25,129 Other 1,019 — — 1,019 Total $ 1,845,504 $ — $ — $ 1,845,504 Year Ended December 31, 2021 (In Thousands) Aaron's Business BrandsMart Unallocated Corporate 2 Elimination Total Gross Profit $ 1,159,489 $ — $ — $ — $ 1,159,489 Earnings (Loss) Before Income Taxes 223,448 — (77,578) — 145,870 Depreciation and Amortization 1 67,836 — 1,851 — 69,687 Capital Expenditures 85,053 — 7,651 — 92,704 1 Excludes depreciation of lease merchandise, which is not included in the chief operating decision maker's measure of depreciation and amortization. 2 |
Stock Compensation
Stock Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Compensation | STOCK COMPENSATION Description of Plans The Company grants stock options, RSUs, RSAs and PSUs to certain employees and directors of the Company under the 2020 Equity and Incentive Plan ("the 2020 Plan"), and previously did so under Aaron's Inc. stock-based compensation plans. The Aaron's Inc. stock-based compensation plans were discontinued in connection with the separation and distribution from PROG Holdings effective November 30, 2020. The 2020 Plan was approved by the Company's Board of Directors on November 11, 2020 and subsequently amended and restated with shareholder approval on August 25, 2021 to increase the number of shares available under the 2020 Plan. Beginning in 2021, as part of the Company’s long-term incentive compensation program and pursuant to the Company’s 2020 Plan, the Company granted a mix of stock options, RSUs, RSAs and PSUs to eligible employees and directors. As of December 31, 2023, the aggregate number of shares of common stock that may be issued or transferred under the 2020 Plan is 1,301,147. Conversion at Separation and Distribution In accordance with the terms of the Employee Matters Agreement between The Aaron's Company and PROG Holdings, all unexercised, unissued and/or unvested share-based awards previously granted to The Aaron's Company employees and directors under the Aaron's, Inc. equity plans through the separation and distribution date of November 30, 2020 were converted at the time of distribution to replacement stock options, RSUs, PSUs and RSAs. The replacement awards were converted using formulas designed to preserve the intrinsic economic value of the awards after taking into consideration the distribution. Employees who held unvested RSAs and PSUs of Aaron's Holdings Company, Inc. on the record date of November 27, 2020 generally had the option to elect one of two conversion methods for determining the replacement awards: i) to receive replacement awards of both The Aaron's Company and PROG Holdings for the number of whole units, rounded down to the nearest whole unit, of The Aaron's Company and PROG Holdings common stock that they would have received as a shareholder of Aaron's Holdings Company, Inc. at the date of separation, which is one share of The Aaron's Company for every two shares of PROG Holdings (i.e., "the shareholder method"); or ii) to receive replacement awards only of the respective employer's common stock of an amount determined by a conversion ratio determined by calculating the product of the pre-distribution share price of Aaron's Holdings Company, Inc. and the pre-distribution number of awards being cancelled and replaced pursuant to this conversion, and then dividing the product by the post-distribution volume weighted adjusted three-day average share price of the respective employer's common stock rounded down to the nearest whole share (i.e., "the employee method"). In accordance with the Employee Matters Agreement, the conversion of certain awards, including substantially all unvested and unexercised vested stock options, was required to be determined following the employee method. The conversion of RSUs held by the Company's board of directors was required to be determined following the shareholder method. Under both the shareholder method and the employee method, the terms and conditions of the converted awards were replicated, and, as necessary, adjusted to ensure that the vesting schedules were unchanged and the awards were converted in accordance with the Employee Matters Agreement. As a result, on the separation date, 2.9 million shares of The Aaron's Company, Inc. common stock (the "converted awards") were converted and deemed issued under the 2020 Plan. In connection with the conversion, certain employees and directors of The Aaron's Company have outstanding equity awards of PROG Holdings, which are not reflected in the tables below. The Company accounted for the conversion of the awards as award modifications in accordance with ASC 718. The Company compared the fair value of the outstanding awards immediately prior to the conversion with the fair value immediately after the conversion, and determined that the conversion of equity awards held by The Aaron's Company employees resulted in incremental compensation expense of $5.5 million which reflects the incremental fair value of the converted awards. Of this total amount, $1.1 million was related to vested but unexercised or unissued equity awards and was recognized immediately on the separation and distribution date. The remaining incremental expense was amortized and recognized over the remaining service periods of the respective awards, with $2.7 million being recognized during the year ended December 31, 2021. The amount recognized during the years ended December 31, 2022 and 2023 was immaterial. The incremental compensation expense associated with the converted award modifications was included as a component of separation costs in the consolidated statements of earnings during the years ended December 31, 2023, 2022 and 2021. Stock-based Compensation Expense The Company has elected a policy to estimate forfeitures in determining the amount of stock compensation expense. Total long-term incentive stock-based compensation expense recognized by the Company was $11.9 million, $12.1 million and $12.8 million for the years ended December 31, 2023, 2022 and 2021, respectively. These costs were included as components of personnel costs, separation costs, and retirement charges, as applicable, in the consolidated statements of earnings. The total income tax benefit recognized in the consolidated statements of earnings for stock-based compensation arrangements was $2.9 million, $3.1 million and $3.2 million in the years ended December 31, 2023, 2022 and 2021, respectively. For the year ended December 31, 2023, compensation cost exceeded the tax deduction resulting in recognition of a tax deficiency of $0.9 million. For the years ended December 31, 2022 and 2021, tax deductions exceeded compensation cost, resulting in recognition of tax benefits of $0.1 million and $0.6 million, respectively. Tax deficiencies and benefits related to compensation cost are included within operating cash flows. As of December 31, 2023, there was $14.8 million of total unrecognized compensation expense related to non-vested stock-based compensation. This expense is expected to be recognized by the Company over a period of 1.42 years. Stock Options Under the 2020 Plan, options granted become exercisable after a period of one The Company determines the fair value of stock options on the grant date using a Black-Scholes-Merton option pricing model that incorporates expected volatility, expected option life, risk-free interest rates and expected dividend yields. The expected volatility is based upon a time-weighted average of the Company's historical life-to-date volatility and the historical volatility of a group of similar peers over the most recent period generally commensurate with the expected estimated life of each respective grant, as well as implied volatilities from traded options on the Company's stock. Due to limited Company-specific exercise history following the November 30, 2020 separation and distribution, the expected life of the options is derived utilizing the simplified method, which finds the midpoint of the vesting date and the end of the contractual term. The risk-free interest rates are determined using the implied yield available for zero-coupon U.S. Treasury STRIPS that have a term equal to the expected life of the grant. The expected dividend yields are based on the approved annual dividend rate and market price of the underlying common stock at the time of grant. The Company granted 273,000, 148,000, and 194,000 stock options during the years ended December 31, 2023, 2022, and 2021, respectively. The weighted-average fair value of options granted and the weighted-average assumptions used in the Black-Scholes-Merton option pricing model for such grants were as follows: 2023 2022 2021 Dividend Yield 4.17 % 2.10 % 1.84 % Expected Volatility 53.86 % 55.38 % 55.73 % Risk-free Interest Rate 4.17 % 1.90 % 0.87 % Expected Term (in years) 6.0 6.0 6.0 Fair Value of Stock Options Granted $ 4.58 $ 9.45 $ 9.56 The table below summarizes the Company's stock option activity for the year ended December 31, 2023: Options Weighted Average Weighted Average Aggregate Weighted Outstanding at January 1, 2023 879 $ 15.45 Granted 273 12.00 Exercised (8) 10.78 Forfeited/expired (23) 14.80 Outstanding at December 31, 2023 1,121 14.66 6.61 $ 527 $ 5.77 Expected to Vest 400 15.61 8.17 — 6.44 Exercisable at December 31, 2023 708 14.16 5.42 527 5.40 The aggregate intrinsic value amounts in the table above represent the closing price of the Company's common stock on December 31, 2023 in excess of the exercise price, multiplied by the number of in-the-money stock options as of that same date. Options outstanding that are expected to vest are net of estimated future option forfeitures. The aggregate intrinsic value of options exercised by the Company's employees, which represents the value of The Aaron's Company, Inc. common stock at the time of exercise in excess of the exercise price was insignificant for the year ended December 31, 2023, and was $0.1 million and $1.8 million for the years ended December 31, 2022 and 2021, respectively. The total grant-date fair value of options vested during the years ended December 31, 2023, 2022, and 2021 was $1.4 million, $1.2 million, and $0.9 million, respectively. The following table summarizes information about the Company's stock options outstanding at December 31, 2023: Options Outstanding Options Exercisable Range of Exercise Number Outstanding December 31, 2023 (In Thousands) Weighted Average Remaining Contractual Weighted Average Number Exercisable December 31, 2023 (In Thousands) Weighted Average $0.00-$10.00 124 2.61 $ 7.19 124 $ 7.19 $10.01-$20.00 672 6.88 12.67 411 13.09 $20.01-$30.00 325 7.60 21.63 173 21.67 $0.00-$30.00 1,121 6.61 14.66 708 14.16 Restricted Stock Restricted stock units or restricted stock awards (collectively, "restricted stock") may be granted to employees and directors under the 2020 Plan and typically vest over one The fair value of restricted stock is generally based on the fair market value of common stock on the date of grant. The fair value of the converted awards was adjusted in accordance with the Employee Matters Agreement and conversion methodology to ensure that the economic value of the awards was unchanged by the conversion. The Company granted 683,000, 557,000, and 347,000 shares of restricted stock at weighted-average fair values of $11.99, $21.38, and $22.89 during the years ended December 31, 2023, 2022, and 2021, respectively. The following table summarizes information about restricted stock activity during 2023: Restricted Stock Weighted Average Non-vested at January 1, 2023 857 $ 21.16 Granted 683 11.99 Vested (326) 19.30 Forfeited/unearned (110) 17.04 Non-vested at December 31, 2023 1,104 16.44 The total vest-date fair value of restricted stock described above that vested during the period was $3.8 million, $4.3 million, and $3.1 million during the years ended December 31, 2023, 2022, and 2021, respectively. Performance Share Units For performance share units granted prior to December 31, 2021, the number of shares earned is determined at the end of a one-year performance period based upon achievement of various Company-specific performance criteria, which have included adjusted EBITDA, revenue, adjusted pre-tax profit and return on capital metrics. When the performance criteria are met, the award is earned and one-third of the award vests. Another one-third of the earned award is subject to an additional one-year service period and the remaining one-third of the earned award is subject to an additional two-year service period. For performance share units granted during the years ended December 31, 2023 and 2022, the number of shares earned is determined at the end of a three-year performance period based upon the average achievement of Company-specific adjusted EBITDA metrics for each of the three performance years. When the performance criteria are met, the award is earned and will cliff vest. The fair value of performance share units with Company-specific performance criteria is based on the fair market value of common stock on the date of grant. The compensation expense associated with performance share units with a graded vesting schedule is amortized on an accelerated basis over the vesting period and performance share units with a cliff vesting schedule are amortized on a straight-line basis over the requisite service period based on the projected assessment of the level of performance that will be achieved and earned. In the event the Company determines it is no longer probable that the minimum Company-specific performance criteria specified in the plan will be achieved, all previously recognized compensation expense is reversed in the period such a determination is made. During the years ended December 31, 2023 and 2022, the Company also issued performance share units with a relative total shareholder return ("TSR") component. For the TSR performance share units, the number of shares earned is determined based on the Company's share price performance relative to a specified peer group's stock performance at the end of a three-year performance period. When the market-based performance criteria are met, the TSR performance share units will cliff vest. The fair value of each TSR performance share unit is determined using a Monte Carlo simulation. The compensation expense associated with performance share units with a cliff vesting schedule is amortized on a straight-line basis over the requisite service period and is based upon the assumption of 100% achievement of the TSR goal. In the event that the market-based performance criteria are not achieved, the TSR awards will not vest; however the compensation expense associated with TSR awards will not be reversed even if the threshold level of TSR is not achieved. The assumptions used in the Monte Carlo valuation for the TSR performance share units granted during the years ended December 31, 2023 and 2022 were as follows: 2023 2022 Risk-free Interest Rate 4.61 % 1.72 % Expected Dividend Yield 4.17 % 2.10 % Expected Volatility 57.35 % 60.68 % Expected Term (in years) 2.82 years 2.85 years Fair Value of TSR Performance Share Units Granted $ 15.81 $ 32.09 Upon vesting, all performance share units are to be issued by the Company with common stock or from its treasury shares, based on treasury share availability. The number of performance-based shares which could potentially be issued ranges from zero to 200% of the target award. The vesting schedules and performance achievement levels of converted awards were unchanged by the conversion. The Company granted 398,000, 355,000, and 136,000 performance share units at weighted-average fair values of $13.91, $26.77, and $27.54 during the years ended December 31, 2023, 2022 and 2021, respectively. The following table summarizes information about the Company's performance share unit activity during the year ended December 31, 2023: Performance Share Units Weighted Average Non-vested at January 1, 2023 485 $ 23.17 Granted 398 13.91 Vested (189) 18.42 Forfeited/unearned (46) 19.82 Non-vested at December 31, 2023 648 16.18 The total vest-date fair value of performance share units described above that vested during the period was $2.3 million and $4.6 million, and $3.9 million during the years ended December 31, 2023, 2022, and 2021, respectively. Employee Stock Purchase Plan Effective November 30, 2020, the Company's Board of Directors approved the Employee Stock Purchase Plan (the "2020 ESPP"), which is a tax-qualified plan under Section 423 of the Internal Revenue Code. The 2020 ESPP was subsequently amended and restated with shareholder approval on May 3, 2023 in the form of The Aaron's Company, Inc. Amended and Restated Employee Stock Purchase Plan (the "A&R ESPP") to: • Increase the Share Reserve from 200,000 to 1,050,000; • Allow participation of highly compensated employees of the Company or a subsidiary who are subject to the disclosure requirements of Section 16(a) of the Securities and Exchange Act of 1934 ("Section 16 officers"); and • Remove the requirement that employees must hold shares of Common Stock purchased for one year prior to exercise. The purpose of the A&R ESPP is to encourage ownership of the Company's common stock by eligible employees. Eligible employees are allowed to purchase common stock of the Company during six-month offering periods at the lower of: (a) 85% of the closing trading price per share of the common stock on the first trading date of an offering period in which a participant is enrolled; or (b) 85% of the closing trading price per share of the common stock on the last day of an offering period. Employees participating in the A&R ESPP can contribute up to an amount not exceeding 10% of their base salary and wages up to an annual maximum of $25,000 in total fair market value of the common stock. The first offering period began on January 1, 2021. As of December 31, 2023, the aggregate number of shares of common stock that may be issued under the A&R ESPP was 836,435. |
Compensation Arrangements
Compensation Arrangements | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Compensation Arrangements | COMPENSATION ARRANGEMENTS Deferred Compensation The Company maintains The Aaron's Company, Inc. Deferred Compensation Plan, which is an unfunded, nonqualified deferred compensation plan for a select group of management, highly compensated employees and non-employee directors. On a pre-tax basis, eligible employees can defer receipt of up to 75% of their base compensation and up to 75% of their incentive pay compensation, and eligible non-employee directors can defer receipt of up to 100% of their cash and stock director fees. Compensation deferred under the plan is recorded as a deferred compensation liability, which is recorded in accounts payable and accrued expenses in the consolidated balance sheets. The deferred compensation plan liability was $10.6 million and $8.6 million as of December 31, 2023 and 2022, respectively. Liabilities under the plan are recorded at amounts due to participants, based on the fair value of participants’ selected investments, which consist of equity and debt "mirror" funds. The obligations are unsecured general obligations of the Company and the participants have no right, interest or claim in the assets of the Company, except as unsecured general creditors. The Company has established a rabbi trust to fund obligations under the plan primarily with company-owned life insurance policies. The value of the assets within the rabbi trust, which is primarily the cash surrender value of the life insurance, was $15.2 million and $13.4 million as of December 31, 2023 and 2022, respectively, and is included in prepaid expenses and other assets in the consolidated balance sheets. The Company recorded a gain of $1.9 million during the year ended December 31, 2023, a loss of $2.3 million during the year ended December 31, 2022, and a gain of $1.6 million during the year ended December 31, 2021, related to changes in the cash surrender value of the life insurance plans. These gains and losses were recorded within other non-operating income (expense), net in the consolidated statements of earnings. Benefits of $0.7 million, $1.3 million and $2.3 million were paid to plan participants during the years ended December 31, 2023, 2022 and 2021, respectively. The terms of The Aaron's Company, Inc. deferred compensation plan include a discretionary match. The match allows eligible employees to receive 100 3 50 2 4 three-year 401(k) Defined Contribution Plan The Company maintains a 401(k) retirement savings plan for employees who meet certain eligibility requirements. The Aaron's Company, Inc. 401(k) savings plan allows employees to contribute up to 75% of their annual compensation in accordance with federal contribution limits with 100% matching by the Company on the first 3% of compensation and 50% on the next 2% of compensation for a total of a 4% match. The Company’s expense related to the plan was $6.3 million in 2023, $6.3 million in 2022 and $5.6 million in 2021. Employee Stock Purchase Plan |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Related Party Transactions with the Sellers of BrandsMart U.S.A. Effective as of the BrandsMart U.S.A. acquisition date, the Company entered into lease agreements for six store locations retained by the sellers of BrandsMart U.S.A., including Michael Perlman, who was employed by the Company for a short period following the acquisition. While Mr. Perlman was no longer employed by the Company as of December 31, 2022, the Company continued to treat the lease agreements as potential related party transactions under the Company's Related Party Transactions Policy through December 2023. The lease agreements include initial terms of ten years, with options to renew each location for up to 20 years thereafter. The Company has recorded these leases within operating lease right-of-use assets and operating lease liabilities in the Company's consolidated balance sheets. The six operating leases are considered to be above market. The value of the off-market element of the lease agreements has been included as a component of the consideration transferred to the sellers of BrandsMart U.S.A. and has been recognized as a reduction to the operating lease right-of-use-asset. The total amounts paid to the sellers of BrandsMart U.S.A. during the year ended December 31, 2023 and 2022 related to real estate activities, including rental payments, maintenance and taxes, were $12.9 million and $9.9 million, respectively. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net Earnings (Loss) | $ 2,823 | $ (5,280) | $ 109,934 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 12 Months Ended |
Dec. 31, 2023 shares | Dec. 31, 2023 shares | |
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | Securities Trading Plans of Directors and Officers During the three months ended December 31, 2023, no director or officer (as defined in Rule 16a-1(f) of the Exchange Act) of the Company adopted or terminated any "Rule 10b5-1 trading arrangement" or any "non-Rule 10b5-1 trading arrangement," as such terms are defined in Item 408 of Regulation S-K except as set forth below: Name and Title Action Date of Action Duration of Trading Arrangements Rule 10b5-1 Trading Arrangement? (Y/N)* Aggregate Number of Securities Subject to Trading Arrangement Douglas Lindsay Chief Executive Officer Terminate November 10, 2023 November 2, 2023 - October 31, 2024 Y 112,566 shares of Common Stock * Denotes whether the trading plan is intended, when adopted, to satisfy the affirmative defense of Rule 10b5-1(c). | |
Rule 10b5-1 Arrangement Adopted | false | |
Non-Rule 10b5-1 Arrangement Adopted | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Douglas Lindsay [Member] | ||
Trading Arrangements, by Individual | ||
Name | Douglas Lindsay | |
Title | Chief Executive Officer | |
Rule 10b5-1 Arrangement Terminated | true | |
Termination Date | November 10, 2023 | |
Arrangement Duration | 364 days | |
Aggregate Available | 112,566 | 112,566 |
Business and Summary of Signi_2
Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business The Company is a leading, technology-enabled, omni-channel provider of lease-to-own ("LTO") and retail purchase solutions of furniture, electronics, appliances, and other home goods across its brands: Aaron's, BrandsMart U.S.A., BrandsMart Leasing, and Woodhaven Furniture Industries ("Woodhaven"). As of December 31, 2023, the Company's operating and reportable segments are the Aaron's Business and BrandsMart, each as described below. The Aaron's Business segment is comprised of (i) Aaron's branded Company-operated and franchise operated stores; (ii) aarons.com e-commerce platform ("aarons.com"); (iii) Woodhaven; and (iv) BrandsMart Leasing (collectively, the "Aaron’s Business"). The operations of BrandsMart U.S.A. (excluding BrandsMart Leasing) comprise the BrandsMart segment (collectively, "BrandsMart"). Aaron's Business Segment Since its founding in 1955, Aaron's has been committed to serving the overlooked and underserved customer with a dedication to inclusion and improving the communities in which it operates. Through a portfolio of approximately 1,240 stores and its aarons.com e-commerce platform, Aaron's, together with its franchisees, provide consumers with LTO and retail purchase solutions for the products they need and want, with a focus on providing its customers with unparalleled customer service, high approval rates, lease plan flexibility, and an attractive value proposition, including competitive monthly payments and total cost of ownership, as compared to other LTO providers. Woodhaven manufactures and supplies a significant portion of the upholstered furniture leased and sold in Company-operated and franchised Aaron's stores. Launched in 2022, BrandsMart Leasing offers LTO purchase solutions to customers of BrandsMart U.S.A. BrandsMart Segment Founded in 1977, BrandsMart U.S.A. is one of the leading appliance and consumer electronics retailers in the southeast United States and one of the largest appliance retailers in the country with 11 stores in Florida and Georgia and a growing e-commerce presence on brandsmartusa.com. The operations of BrandsMart U.S.A. (other than BrandsMart Leasing) comprise the BrandsMart segment. |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements of the Company and its wholly-owned subsidiaries for the years ended December 31, 2023, December 31, 2022, and December 31, 2021 reflect the historical results of operations, financial position and cash flows of the Company in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). Intercompany balances and transactions between consolidated entities have been eliminated and reflect the historical results of operations, financial position and cash flows of the Company in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). |
Reclassifications | Reclassifications The following reclassifications have been made to the prior periods to conform to the current period presentation. For all previously reported periods prior to April 1, 2022, the Company presented all revenues derived from lease agreements and the related fees, as well as the retail sale of both new and returned lease merchandise from our Company-operated Aaron's stores and fees from our Aaron's Club program within one line in the consolidated statements of earnings, presented as lease and retail revenues. Effective April 1, 2022, the Company revised its presentation to separately present revenues derived from lease agreements at our Company-operated Aaron's stores and e-commerce platform and fees from our Aaron's Club program as lease revenues and fees in the consolidated statements of earnings, with the sale of both new and returned lease merchandise from our Company-operated Aaron's stores being classified as retail sales. This revised presentation does not have an impact on total revenues presented in prior periods. Similarly, for all previously reported periods prior to April 1, 2022, the Company presented the depreciation expense associated with lease merchandise as well as the depreciated costs of merchandise sold within one line in the consolidated statements of earnings, presented as the cost of lease and retail revenues. Effective April 1, 2022, the Company revised its presentation to separately present the depreciation expense associated with lease merchandise in the consolidated statements of earnings, with the costs associated with merchandise sold through our Company-operated Aaron's stores presented as retail cost of sales. This revised presentation does not have an impact on total costs of revenues presented in prior periods. |
Segment Reporting | Segment Reporting As of December 31, 2023, the Company has two operating and reportable segments: Aaron's Business and BrandsMart. During the year ended December 31, 2022, the Company changed its composition of reportable segments to align the reportable segments with the current organizational structure and the operating results that the chief operating decision maker regularly reviews to analyze performance and allocate resources, which includes separate segments for the Aaron's Business and BrandsMart, along with an Unallocated Corporate category for remaining unallocated costs. The Company has retroactively adjusted, for all periods presented, its segment disclosures to align with the current composition of reportable segments. The Aaron's Business segment provides consumers with LTO and retail purchase solutions through the Company's Aaron's stores in the United States and Canada and the aarons.com e-commerce platform. This operating segment also supports franchisees of its Aaron's stores. In addition, the Aaron's Business segment includes the operations of BrandsMart Leasing, which offers lease-to-own solutions to BrandsMart U.S.A. customers, and Woodhaven, which manufactures and supplies a significant portion of the upholstered furniture leased and sold in Company-operated and franchised Aaron's stores. |
Revenue Recognition | Revenue Recognition The Company provides lease and retail merchandise, consisting of appliances, electronics, furniture, and other home goods to its customers for lease under certain terms agreed to by the customer and through retail sales. The Company's Aaron's stores, aarons.com e-commerce platform, and BrandsMart Leasing components of the Aaron's Business segment offer leases with flexible ownership plans that can be generally renewed weekly, bi-weekly, semi-monthly, or monthly up to 12, 18 or 24 months. The Aaron's Business segment also earns revenue from the sale of merchandise to customers and Aaron's franchisees, and earns ongoing revenue from Aaron's franchisees in the form of royalties and through advertising efforts that benefit the franchisees. The Company's BrandsMart U.S.A. stores and related brandsmartusa.com e-commerce platform offer the sale of merchandise directly to its customers via retail sales. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Earnings per share is computed by dividing net earnings (loss) by the weighted average number of shares of common stock outstanding during the period. The computation of earnings (loss) per share assuming dilution includes the dilutive effect of stock options, RSUs, RSAs, PSUs and other awards issuable under the Company's ESPP (collectively, "share-based awards") as determined under the treasury stock method, unless the inclusion of such awards would be anti-dilutive. |
Lease Merchandise | Lease Merchandise The Company’s lease merchandise is recorded at the lower of depreciated cost, including overhead costs from our distribution centers, or net realizable value. The cost of merchandise manufactured by our Woodhaven operations is recorded at cost and includes overhead from production facilities, shipping costs and warehousing costs. The Company begins depreciating furniture and appliances at the earlier of the lease date or 24 months and one day from its purchase, while all other lease merchandise begins depreciating at the earlier of the lease date or 12 months and one day from its purchase. Lease merchandise fully depreciates over the lease agreement period when on lease, generally 12 to 24 months, and generally 36 months when not on lease. Depreciation is accelerated upon early payout. The Aaron's store-based operations' policies require weekly merchandise counts at its store-based operations, which include write-offs for unsalable, damaged, or missing merchandise inventories. Monthly cycle counting procedures are performed at both the Aaron's distribution centers and Woodhaven manufacturing facilities. Physical inventories are also taken at the manufacturing facilities annually. The Company also monitors merchandise levels and mix by division, store, and distribution center, as well as the average age of merchandise on hand. If obsolete merchandise cannot be returned to vendors, its carrying amount is adjusted to its net realizable value or written off. Generally, all merchandise not on lease is available for lease or sale. On a monthly basis, all damaged, lost or unsalable merchandise identified is written off and is included as a component of the provision for lease merchandise write-offs in the accompanying consolidated statements of earnings. The Company records a provision for write-offs using the allowance method, which is included within lease merchandise, net within the consolidated balance sheets. The allowance method for lease merchandise write-offs estimates the merchandise losses incurred but not yet identified by management as of the end of the accounting period based primarily on historical write-off experience. Other qualitative factors are considered in estimating the allowance, such as seasonality and the impacts of uncertainty surrounding inflationary and other economic pressures in the current macroeconomic environment. Therefore, actual lease merchandise write-offs could differ from the allowance. The provision for write-offs is included in provision for lease merchandise write-offs in the accompanying consolidated statements of earnings. The Company writes off lease merchandise on lease agreements that are 60 days or more past due on pre-determined dates twice monthly. The Company writes off lease merchandise on lease agreements for its BrandsMart Leasing operations that are 90 days or more past due on pre-determined dates twice monthly. |
Merchandise Inventories | Merchandise Inventories The Company’s merchandise inventories are stated at the lower of weighted average cost or net realizable value, and consist entirely of merchandise held for sale by the BrandsMart segment. In-bound freight-related costs from vendors, net of allowances and vendor rebates, are included as part of the net cost of merchandise inventories. Costs associated with storing and transporting merchandise inventories to our retail stores are expensed as incurred and included within retail cost of sales in the consolidated statements of earnings. The Company periodically evaluates aged and distressed inventory and establishes an inventory markdown which represents the excess of the carrying value over the amount the Company expects to realize from the ultimate sale of the inventory. Markdowns establish a new cost basis for the inventory and are recorded within retail cost of sales within the consolidated statements of earnings. The write-offs of merchandise inventories associated with the Company's cycle and physical inventory count processes are also included within retail cost of sales in the consolidated statements of earnings. The Company records an inventory reserve for the anticipated loss associated with selling inventories below cost. This reserve is based on management’s current knowledge with respect to inventory levels, sales trends, and historical experience selling or disposing of aged or obsolete inventory. |
Retail and Non-Retail Cost of Sales and Shipping and Handling Costs | Retail and Non-Retail Cost of Sales Included in retail cost of sales, as well as non-retail cost of sales, is the net book value of merchandise sold via retail and non-retail sales, primarily using specific identification. The components of cost of sales are further described below. Depreciation of Lease Merchandise and Other Lease Revenue Costs The primary items classified under the expense category "Depreciation of Lease Merchandise and Other Lease Revenue Costs" are: • Depreciation of the capitalized costs (recorded at the lower of depreciated costs or net realizable value) of available and on rent lease merchandise at the Aaron’s Business segment. Capitalized costs include: ◦ Landed Inventory Costs ◦ Overhead Costs incurred at our internal distribution centers, including transportation costs incurred to transfer inventory from the Company's fulfillment centers to Company Operated stores ◦ Freight expenses associated with receiving the inventory from our vendors ◦ Costs of manufactured inventory at our Woodhaven operations including overhead from production facilities, shipping costs and warehousing costs • Accelerated depreciation associated with early payout transactions • Amortization of Aaron's Business cooperative advertising consideration, received from vendors, that are not specifically identifiable incremental costs incurred in selling those vendor's products • Amortization of rebate credits associated with the leasing of lease merchandise at the Aaron's Business • External service provider fees associated with hosting the Aaron's Club program Retail Cost of Sales - Aaron's Business The primary items classified under the expense category "Retail Cost of Sales" for the Aaron's Business segment are: • Costs of the NBV of lease merchandise (recorded at the lower of depreciated costs or net realizable value) at the Aaron's Business segment including: ◦ Landed Inventory Costs ◦ Overhead Costs incurred at our internal distribution centers, including transportation costs incurred to transfer inventory from the Company's fulfillment centers to Company Operated stores ◦ Freight expenses associated with receiving the inventory from our vendors ◦ Costs of manufactured inventory at our Woodhaven operations including overhead from production facilities, shipping costs and warehousing costs • Amortization of Aaron's Business cooperative advertising consideration, received from vendors, that are not specifically identifiable incremental costs incurred in selling those vendor's products • Amortization of rebate credits associated with the retail sale of lease merchandise at the Aaron's Business Retail Cost of Sales - BrandsMart The primary items classified under the expense category "Retail Cost of Sales" for the BrandsMart Business segment are: • Weighed average costs of landed inventory invoice costs (recorded at the lower of weighted average costs or net realizable value) • Overhead Costs incurred at our internal distribution centers • Freight expenses associated with receiving the inventory from our vendors • Transportation costs incurred to transfer inventory from the Company's fulfillment centers to stores • Cooperative advertising consideration, received from vendors, that are not specifically identifiable incremental costs incurred in selling those vendor's products • Vendor rebate credits associated with the retail sale of merchandise inventories • Subsequent markdowns of merchandise inventories • Third party transportation and internal vehicle charges associated with customer shipping and handling • Charges/Provisions for shrink and obsolescence • Cost of services provided including personnel related costs, replacement costs, and freight expenses Non-Retail Cost of Sales - Aaron's Business The primary items classified under the expense category "Non-Retail Cost of Sales" for the Aaron's Business segment are: • Cost of the NBV of lease merchandise (recorded at the lower of depreciated costs or net realizable value) sold to Aaron's Business franchisees or wholesale customers of our Woodhaven operations which includes: ◦ Landed Inventory Costs ◦ Overhead Costs incurred at our internal distribution centers ◦ Freight expenses associated with receiving the inventory from our vendors ◦ Costs of manufactured inventory at our Woodhaven operations including overhead from production facilities, shipping costs and warehousing costs ◦ Transportation costs incurred to transfer inventory from the Company's fulfillment centers to franchisees and non-retail customers • Amortization of Aaron's Business cooperative advertising consideration, received from vendors, that are not specifically identifiable incremental costs incurred in selling those vendor's products Shipping and Handling Costs Shipping and handling costs are primarily classified within other operating expenses, net in the accompanying consolidated statements of earnings and to a lesser extent, capitalized into the cost of lease merchandise and subsequently depreciated or recognized as cost of retail sales. Shipping and handling costs classified within other operating expenses, net were $64.1 million, $70.1 million and $60.4 million for the years ended December 31, 2023, 2022 and 2021, respectively. Shipping and handling costs capitalized into the cost of lease merchandise were $23.3 million, $27.4 million and $25.4 million for the years ended December 31, 2023, 2022 and 2021, respectively. |
Advertising | Advertising Total advertising costs are classified within other operating expenses, net in the consolidated statements of earnings. These advertising costs are presented net of cooperative advertising considerations received from vendors, which represents reimbursement of specific, identifiable and incremental costs incurred in selling those vendors’ products, and are recorded as a reduction of advertising costs. |
Stock-Based Compensation | Stock-Based Compensation The Company has stock-based employee compensation plans, which are more fully described in Note 13 to these consolidated financial statements. The Company estimates the fair value for the options granted on the grant date using a Black-Scholes-Merton option-pricing model. The fair value of each share of restricted stock units ("RSUs"), restricted stock awards ("RSAs") and performance share units ("PSUs") with Company-specific performance criteria is equal to the market value of a share of the Company's common stock on the grant date. For PSUs that are granted with a total shareholder return ("TSR") component, management estimates the fair value using a Monte Carlo simulation valuation model, as these awards are subject to a market condition. For all stock award types, the Company considers whether any material nonpublic information is known to the Company at the time the awards are granted that could impact the determined grant date fair value. No adjustments to fair value were deemed necessary for the years ended December 31, 2023, 2022 or 2021 based on these considerations. The Company estimates the fair value of awards issued under the Company's employee stock purchase plan ("A&R ESPP") using a series of Black-Scholes-Merton pricing models that consider the components of the "lookback" feature of the plan, including the underlying stock, call option, and put option. The design of awards issued under the A&R ESPP is more fully described in Note 13 to these consolidated financial statements. Separation Costs Separation costs include actual expenses after November 30, 2020 associated with the separation and distribution from PROG Holdings, Inc. (referred to herein as "PROG Holdings"), including personnel-related costs and incremental stock-based compensation expense associated with the conversion and modification of unvested and unexercised equity awards related to Company employees, as well as an allocation of similar expenses related to PROG Holdings' corporate and shared function employees. See Note 13 to these consolidated financial statements for additional information regarding the modification of awards that were converted concurrent with the separation and distribution. Separation costs also include one-time expenses incurred by the Company in order to begin operating as an independent, standalone public entity after the completion of the separation and distribution. These costs will be fully expensed in the first quarter of 2024. |
Acquisition-Related Costs | Acquisition-Related Costs Acquisition-related costs of $3.6 million and $14.6 million were incurred during the years ended December 31, 2023 and 2022, respectively, and primarily represent third-party consulting in 2023, while in 2022 it included third-party consulting as well as banking and legal expenses associated with the acquisition of BrandsMart U.S.A completed April 1, 2022. |
Income Taxes | Income Taxes The Company and its subsidiaries file U.S. federal consolidated income tax returns in the United States, and separate legal entities file in various state and foreign jurisdictions. In all periods presented, the income tax provision has been computed for the entities comprising the Company on a standalone, separate return basis as if the Company were a separate taxpayer. The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. Income taxes as presented attribute deferred income taxes of the Company's standalone consolidated financial statements in a manner that is systematic, rational and consistent with the asset and liability method. The provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from differences between the financial and tax basis of the Company’s assets and liabilities and are adjusted for changes in tax rates and tax laws when such changes are enacted. The Company's largest temporary differences arise principally from the use of accelerated depreciation methods on lease merchandise for tax purposes. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. The Company recognizes uncertain tax positions in the consolidated financial statements when it is more likely than not that the tax position will be sustained upon examination. Uncertain tax positions are measured based on the probabilities that the uncertain tax position will be realized upon final settlement. |
Sales Taxes | Sales Taxes The Company applies the net basis for sales taxes imposed on goods and services in the consolidated statements of earnings. The Company is required by the applicable governmental authorities to collect and remit sales taxes. Accordingly, such amounts are charged to the customer, collected, and remitted directly to the appropriate jurisdictional entity. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company classifies as cash equivalents any highly liquid investments that have maturity dates of three months or less at the time they are purchased. The Company maintains its cash and cash equivalents at various banks. Bank balances may exceed coverage provided by the Federal Deposit Insurance Corporation ("FDIC"). However, due to the size and strength of the banks in which balances that exceed the FDIC coverage are held, any exposure to loss is believed to be minimal. Cash and cash equivalents also includes amounts in transit due from financial institutions related to credit card and debit card transactions, which generally settle within three business days from the original transaction. |
Accounts Receivable | Accounts Receivable Accounts receivable consist primarily of receivables due from customers on lease agreements, corporate receivables incurred during the normal course of business (primarily for vendor consideration and third-party warranty providers) and franchisee obligations. The Company maintains an accounts receivable allowance for the Aaron's Business customer lease agreements, under which its policy is to record a provision for returns and uncollectible contractually due renewal payments based on historical payments experience, which is recognized as a reduction of lease revenues and fees within the consolidated statements of earnings. Other qualitative factors are considered in estimating the allowance, such as current and forecasted business trends. The Company writes off customer lease receivables for its Aaron's Business operations that are 60 days or more past due on pre-determined dates twice monthly. The Company writes off customer lease receivables for its BrandsMart Leasing operations that are 90 days or more past due on pre-determined dates twice monthly. The Company also maintains an allowance for outstanding franchisee accounts receivable. The Company's policy is to estimate future losses related to certain franchisees that are deemed to have a higher risk of non-payment and record an allowance for these estimated losses. The estimated allowance on franchisee accounts receivable includes consideration of the financial position of each franchisee and qualitative consideration of potential losses associated with uncertainties impacting the franchisee's ability to satisfy their obligations. Uncertainties include inflationary and other economic pressures in the current macroeconomic environment. Accordingly, actual accounts receivable write-offs could differ from the allowance. The provision for uncollectible franchisee accounts receivable is recorded as bad debt expense in other operating expenses, net within the consolidated statements of earnings. The allowance related to corporate receivables is not significant for the years ended December 31, 2023 and 2022. |
Property, Plant and Equipment | Property, Plant and Equipment The Company records property, plant and equipment at cost. Depreciation and amortization are computed on a straight-line basis over the estimated useful lives of the respective assets, which range from five one Costs incurred to develop software for internal use are capitalized and amortized over the estimated useful life of the software, which ranges from five Gains and losses related to dispositions and retirements are recognized as incurred. Maintenance and repairs are also expensed as incurred, and leasehold improvements are capitalized and amortized over the lesser of the expected lease term or the asset's useful life. Depreciation expense for property, plant and equipment is classified within other operating expenses, net in the accompanying consolidated statements of earnings and was $79.9 million, $76.8 million and $64.2 million during the years ended December 31, 2023, 2022 and 2021, respectively. Amortization of previously capitalized internal use software development costs, which is a component of depreciation expense for property, plant and equipment, was $19.6 million, $20.8 million and $18.6 million during the years ended December 31, 2023, 2022 and 2021, respectively. Management assesses its long-lived assets other than goodwill for impairment whenever facts and circumstances indicate that the carrying amount may not be fully recoverable. If it is determined that the carrying amount of an asset is not recoverable, based on analysis of undiscounted cash flows expected to be generated by the asset or asset group, management compares the carrying amount of the asset to its fair value as estimated using discounted expected future cash flows, market values or replacement values for similar assets. The amount by which the carrying amount exceeds the fair value of the asset, if any, is recognized as an impairment loss. |
Derivative Instruments | Derivative Instruments In March 2023, the Company entered into a non-speculative interest rate swap agreement for an aggregate notional amount of $100.0 million with an effective date of April 28, 2023 and a termination date of March 31, 2027. The purpose of this hedge is to limit the Company's exposure of its variable interest rate debt by effectively converting it to fixed interest rate debt. Under the terms of the agreement, the Company will receive a floating interest rate based on 1-month Chicago Mercantile Exchange ("CME") Term Secured Overnight Financing Rate ("SOFR") and pay a fixed interest rate of 3.87% on the notional amount. The Company has accounted for the interest rate swap as a cash flow hedge instrument in accordance with ASC 815, Derivatives and Hedging . Accordingly, the effective portion of the gains and losses associated with the changes in the fair value of the cash flow hedge instrument are recognized as a component of accumulated other comprehensive loss in the Company's consolidated balance sheets. Such amounts are reclassified into earnings in the same period during which the cash flow hedging instrument affects earnings. As of December 31, 2023, the facts and circumstances of the hedged relationship remain consistent with the initial effectiveness assessment and the hedging instrument remains an effective accounting hedge. The fair value of the hedge as of December 31, 2023 was a liability of $0.5 million, and has been recorded within accounts payable and accrued expenses in the Company's consolidated balance sheets. During the year ended December 31, 2023, the Company reclassified $0.9 million of net gains from accumulated other comprehensive loss to interest expense. Gains and losses related to the hedge were classified within operating activities in the consolidated statements of cash flows. See Note 4 to these consolidated financial statements for further information regarding the fair value determination of the Company's interest rate swap agreement. Derivative instruments in place in prior years were not significant. |
Estimated Claims Liability Costs | Estimated Claims Liability Costs Estimated claims liability costs are accrued primarily for workers compensation and vehicle liability at the Aaron's Business segment, as well as general liability and group health insurance benefits provided to team members. These liabilities are recorded within estimated claims liability costs within accounts payable and accrued expenses in the consolidated balance sheets. Estimates for these claims liabilities are made based on actual reported but unpaid claims and actuarial analysis of the projected claims run off for both reported and incurred but not reported claims. This analysis is based upon an assessment of the likely outcome or historical experience and considers a variety of factors, including the actuarial loss forecasts, company-specific development factors, general industry loss development factors and third-party claim administrator loss estimates of individual claims. The Company makes periodic prepayments to its insurance carriers to cover the projected claims run off for both reported and incurred but not reported claims, considering its retention or stop loss limits. In addition, we have prefunding balances on deposit and other insurance receivables with the insurance carriers which are recorded within prepaid expenses and other assets in our consolidated balance sheets. |
Asset Retirement Obligations | Asset Retirement Obligations The Company accrues for asset retirement obligations, which relate to expected costs to remove exterior signage, in the period in which the obligations are incurred. These costs are accrued at fair value. When the related liability is initially recorded, the Company capitalizes the cost by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its settlement value and updated for changes in estimates. Upon settlement of the liability, the Company recognizes a gain or loss for any differences between the settlement amount and the liability recorded. Asset retirement obligations, which are included in accounts payable and accrued expenses in the consolidated balance sheets, amounted to $2.1 million and $2.2 million as of December 31, 2023 and 2022, respectively. The capitalized cost is depreciated over the useful life of the related asset. |
Fair Value Measurement | Fair Value Measurement Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets. Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3—Valuations based on unobservable inputs reflecting management’s own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. The fair values of the Company’s current financial assets and liabilities, such as cash and cash equivalents, accounts receivable and accounts payable, approximate their carrying values due to their short-term nature. The Company's outstanding debt borrowings as of December 31, 2023 and December 31, 2022 were subject to a variable interest rate. Therefore, the fair value of these borrowings also approximates its carrying value. These assets and liabilities are measured within Level 2 of the fair value hierarchy. The Company also measures certain non-financial assets at fair value on a nonrecurring basis, such as goodwill, intangible assets, operating lease right-of-use assets, and property, plant and equipment, in connection with periodic evaluations for potential impairment. The Company measures a liability related to its non-qualified deferred compensation plan, which represents benefits accrued for participants that are part of the plan and is valued at the quoted market prices of the participants' investment election, at fair value on a recurring basis. The Company measures assets held for sale at fair value on a nonrecurring basis and records impairment charges when they are deemed to be impaired. On April 1, 2022, the Company completed the previously announced acquisition of all of the issued and outstanding shares of capital stock of BrandsMart U.S.A. For the fair value measurements performed related to the net assets acquired, including acquired intangible assets, the Company utilized multiple Level 3 inputs and assumptions, such as estimates about costs of capital, future projected performance and cash flows. |
Foreign Currency | Foreign Currency The financial statements of the Company’s Canadian subsidiary are translated from the Canadian dollar functional currency to U.S. dollars using month-end rates of exchange for assets and liabilities, and average rates of exchange for revenues, costs and expenses. Translation gains and losses of the subsidiary are recorded in accumulated other comprehensive loss as a component of equity. The Company's assets include assets from Canadian operations of $13.4 million and $13.1 million as of December 31, 2023 and 2022, respectively. Foreign currency remeasurement gains and losses are recorded primarily due to remeasurement of the financial assets and liabilities of the Company's Canadian stores between the Canadian dollar and the U.S. dollar and were not significant in 2023, 2022 or 2021. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Adopted In October 2021, the Financial Accounting Standards Board ("FASB") issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU 2021-08"), which requires contract assets and contract liabilities (e.g., deferred revenue) acquired in a business combination to be recognized and measured in accordance with ASC Topic 606, Revenue from Contracts with Customers , rather than at its assumed acquisition date fair value. The Company elected to early adopt ASU 2021-08 in the second quarter of 2022, and therefore accounted for deferred revenue contracts acquired in connection with the BrandsMart U.S.A. acquisition under this standard. The adoption of the standard has no retrospective impact to the Company's historical consolidated and combined financial statements. Effective in Future Periods In October 2023, the FASB issued an accounting pronouncement (ASU 2023-06) related to disclosure or presentation requirements for various subtopics in the FASB’s Accounting Standards Codification ("Codification"). The amendments in the update are intended to align the requirements in the Codification with the U.S. Securities and Exchange Commission's ("SEC") regulations and facilitate the application of GAAP for all entities. The effective date for each amendment is the date on which the SEC removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or if the SEC has not removed the requirements by June 30, 2027, this amendment will be removed from the Codification and will not become effective for any entity. Early adoption is prohibited. We do not expect this update to have a material impact on our consolidated financial statements. In November 2023, the FASB issued an accounting pronouncement (ASU 2023-07) related to the disclosure of incremental segment information on an annual and interim basis. This update is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective application to all prior periods presented in the financial statements. We plan to adopt this pronouncement beginning with our fiscal year ended December 31, 2024, and we do not expect it to have a material effect on our consolidated financial statements. In December 2023, the FASB issued an accounting pronouncement (ASU 2023-09) related to income tax disclosures. The amendments in this update are intended to enhance the transparency and decision usefulness of income tax disclosures primarily through changes to the rate reconciliation and income taxes paid information. This update is effective for annual periods beginning after December 15, 2024, though early adoption is permitted. We plan to adopt this pronouncement for our fiscal year beginning January 1, 2025, and we do not expect it to have a material effect on our consolidated financial statements. |
Business and Summary of Signi_3
Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Calculated Dilutive Stock Awards | The following table shows the calculation of weighted-average shares outstanding assuming dilution: Year Ended December 31, (Shares In Thousands) 2023 2022 2021 Weighted Average Shares Outstanding 30,778 30,881 32,992 Dilutive Effect of Share-Based Awards 1 327 — 730 Weighted Average Shares Outstanding Assuming Dilution 31,105 30,881 33,722 1 There was no dilutive effect to the loss per common share for the year ended December 31, 2022 due to the net loss incurred in the period. |
Schedule of Lease Merchandise | The following is a summary of lease merchandise, net of accumulated depreciation and allowances: December 31, (In Thousands) 2023 2022 Merchandise on Lease, net of Accumulated Depreciation and Allowances $ 419,531 $ 446,923 Merchandise Not on Lease, net of Accumulated Depreciation and Allowances 1 202,731 246,872 Lease Merchandise, net of Accumulated Depreciation and Allowances 2 $ 622,262 $ 693,795 1 Includes Woodhaven's inventory, which is primarily comprised of raw materials, that has been classified within lease merchandise in the consolidated balance sheets of $8.7 million and $12.9 million as of December 31, 2023 and 2022, respectively. 2 General and administrative overhead costs capitalized into the cost of lease merchandise were $54.0 million, $55.7 million, and $55.0 million for the years ended December 31, 2023, 2022 and 2021, respectively. Capitalized overhead costs remaining in lease merchandise were $55.9 million and $55.1 million as of December 31, 2023 and 2022, respectively. |
Schedule of Allowance for Lease Merchandise | The following table shows the components of the allowance for lease merchandise write-offs: Year Ended December 31, (In Thousands) 2023 2022 2021 Beginning Balance $ 13,894 $ 12,339 $ 11,599 Merchandise Written off, net of Recoveries (82,477) (96,009) (67,148) Provision for Write-offs 81,495 97,564 67,888 Ending Balance $ 12,912 $ 13,894 $ 12,339 |
Schedule of Inventory | The following is a summary of merchandise inventories, net of allowances: (In Thousands) December 31, 2023 December 31, 2022 Merchandise Inventories, gross $ 91,093 $ 96,945 Reserve for Merchandise Inventories (921) (981) Merchandise Inventories, net $ 90,172 $ 95,964 The following table shows the components of the reserve for merchandise inventories: Year Ended (In Thousands) December 31, 2023 December 31, 2022 Beginning Balance $ 981 $ — Merchandise Written off (618) — Provision for Write-offs 558 981 Ending Balance $ 921 $ 981 |
Schedule Advertising Cost | The following table shows total advertising costs, net of cooperative advertising consideration: Year Ended December 31, (In Thousands) 2023 2022 2021 Advertising Costs, Gross $ 75,153 $ 74,864 $ 80,602 Less: Cooperative Advertising Considerations (33,792) (35,743) (26,951) Advertising Costs, Net $ 41,361 $ 39,121 $ 53,651 |
Schedule of Supplemental Cash Flow Information | The following table shows supplemental cash flow information: Year Ended December 31, (In Thousands) 2023 2022 2021 Net Cash Paid During the Year: Interest $ 15,973 $ 6,618 $ 991 Income Taxes $ 11,680 $ 5,498 $ 9,654 |
Schedule of Accounts Receivable Net of Allowances | Accounts receivable, net of allowances, consist of the following: December 31, (In Thousands) 2023 2022 Customers $ 8,737 $ 9,721 Corporate 23,660 20,597 Franchisee 7,385 7,873 $ 39,782 $ 38,191 |
Schedule of Allowance for Doubtful Accounts | The following table shows the components of the accounts receivable allowance: Year Ended December 31, (In Thousands) 2023 2022 2021 Beginning Balance $ 8,895 $ 7,163 $ 7,613 Accounts Written Off, net of Recoveries (39,755) (39,728) (28,414) Accounts Receivable Provision 39,889 41,460 27,964 Ending Balance $ 9,029 $ 8,895 $ 7,163 The following table shows the components of the accounts receivable provision, which includes amounts recognized for bad debt expense and the provision for returns and uncollected payments: Year Ended December 31, (In Thousands) 2023 2022 Bad Debt Expense $ 355 $ 124 Provision for Returns and Uncollectible Renewal Payments 39,534 41,336 Accounts Receivable Provision $ 39,889 $ 41,460 |
Schedule of Prepaid Expenses and Other Assets | Prepaid expenses and other assets consist of the following: December 31, (In Thousands) 2023 2022 Prepaid Expenses $ 14,482 $ 20,218 Insurance Related Assets 33,035 25,103 Company-Owned Life Insurance 15,231 13,443 Deferred Tax Assets 24,137 16,277 Other Assets 1,2 18,512 21,395 $ 105,397 $ 96,436 1 Amounts as of December 31, 2023 and 2022 included restricted cash of $1.6 million held as collateral for BrandsMart U.S.A.'s workers' compensation and general liability insurance policies. 2 Amounts included $0.9 million and $1.9 million for the years ended December 31, 2023 and 2022, respectively, of certain properties classified as held for sale. Assets held for sale are recorded at the lower of their carrying value or fair value less estimated cost to sell and are classified within prepaid expenses and other assets in the consolidated balance sheets. Depreciation is suspended on assets upon classification as held for sale. The highest and best use of these assets is as real estate land parcels for development or real estate properties for use or lease, though the Company has chosen not to develop or use these properties, and plans to sell them to third parties as quickly as practicable. |
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in accumulated other comprehensive income (loss) ("AOCI") by component for the years ended December 31, 2023 and 2022 are summarized below: Year Ended December 31, 2023 (In Thousands) Derivative Instruments Foreign Currency Total Balance at December 31, 2022 $ (17) $ (1,379) $ (1,396) Other Comprehensive (Loss) Income, net of Tax (425) 466 41 Balance at December 31, 2023 $ (442) $ (913) $ (1,355) Year Ended December 31, 2022 (In Thousands) Derivative Instruments Foreign Currency Total Balance at December 31, 2021 $ — $ (739) $ (739) Other Comprehensive Loss, net of Tax (17) (640) (657) Balance at December 31, 2022 $ (17) $ (1,379) $ (1,396) |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consist of the following: December 31, (In Thousands) 2023 2022 Accounts Payable $ 134,191 $ 106,966 Estimated Claims Liability Costs 64,082 58,549 Accrued Salaries and Benefits 39,058 33,932 Accrued Real Estate and Sales Taxes 20,146 24,030 Other Accrued Expenses and Liabilities 34,698 40,566 $ 292,175 $ 264,043 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | (In Thousands) Preliminary Amounts Recognized as of Acquisition Date 2023 Measurement Period Adjustments Final Amounts Recognized as of Acquisition Date Cash Consideration to BrandsMart U.S.A. $ 230,000 $ — $ 230,000 Acquired Cash 15,952 — 15,952 Estimated Excess Working Capital, net of Cash 35,599 — 35,599 Non-Cash Off-Market Lease Agreement 6,823 — 6,823 Aggregate Consideration Transferred 288,374 — 288,374 Total Purchase Consideration, Net of Cash Acquired $ 272,422 $ — $ 272,422 Estimated Fair Value of Identifiable Assets Acquired and Liabilities Assumed Accounts Receivable 4,310 — 4,310 Merchandise Inventories 124,064 173 124,237 Property, Plant and Equipment 22,053 (1,361) 20,692 Operating Lease Right-of-Use Assets 160,210 — 160,210 Other Intangibles 122,950 — 122,950 Prepaid Expenses and Other Assets 9,049 (80) 8,969 Total Identifiable Assets Acquired 442,636 (1,268) 441,368 Accounts Payable and Accrued Expenses 25,340 (2,050) 23,290 Customer Deposits and Advance Payments 25,332 1,822 27,154 Operating Lease Liabilities 158,712 — 158,712 Debt 15,540 — 15,540 Total Liabilities Assumed 224,924 (228) 224,696 Net Assets Acquired 217,712 (1,040) 216,672 Goodwill 54,710 1,040 55,750 Total Estimated Fair Value of Net Assets Acquired $ 272,422 $ — $ 272,422 |
Goodwill and Intangibles (Table
Goodwill and Intangibles (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | (In Thousands) Aaron's Business BrandsMart BrandsMart Leasing Total Balance at January 1, 2022 $ 13,134 $ — $ — $ 13,134 Acquisitions — 62,268 — 62,268 Currency Translation Adjustments (94) — — (94) Acquisition Accounting Adjustments (107) (34,075) 26,517 (7,665) Impairment Loss (12,933) — — (12,933) Balance at December 31, 2022 $ — $ 28,193 $ 26,517 $ 54,710 Acquisitions — — — — Currency Translation Adjustments — — — — Acquisition Accounting Adjustments — 1,040 — 1,040 Balance at December 31, 2023 $ — $ 29,233 $ 26,517 $ 55,750 |
Summary of Identifiable Intangible Assets | The following table summarizes information related to the Company's definite-lived intangible assets at December 31 : 2023 2022 (In Thousands) Gross Accumulated Net Gross Accumulated Net Customer Relationships $ 209 $ (164) $ 45 $ 696 $ (455) $ 241 Reacquired Franchise Rights 4,122 (2,976) 1,146 5,440 (3,539) 1,901 Non-Compete Agreements 256 (152) 104 320 (111) 209 Expanded Customer Base 862 (818) 44 1,440 (1,157) 283 Trade Names 108,000 (9,450) 98,550 108,000 (4,050) 103,950 Customer List 14,700 (6,431) 8,269 14,700 (2,756) 11,944 Total $ 128,149 $ (19,991) $ 108,158 $ 130,596 $ (12,068) $ 118,528 |
Estimated Future Amortization Expense | As of December 31, 2023, estimated future amortization expense for the next five years related to the Company's definite-lived intangible assets is as follows: (In Thousands) 2024 $ 9,776 2025 9,489 2026 6,512 2027 5,432 2028 5,400 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table summarizes financial liabilities measured at fair value on a recurring basis: December 31, 2023 December 31, 2022 (In Thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Deferred Compensation Liability $ — $ (10,574) $ — $ — $ (8,621) $ — Interest Rate Swap Liability $ — $ (468) $ — $ — $ — $ — |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment | The following is a summary of the Company’s property, plant, and equipment: December 31 (In Thousands) 2023 2022 Land $ 10,043 $ 11,740 Buildings and Improvements 44,013 43,309 Leasehold Improvements and Signs 155,912 134,312 Vehicles 103,067 96,543 Fixtures and Equipment 102,848 105,362 Software - Internal Use 164,262 143,091 Construction in Progress 8,212 15,080 588,357 549,437 Less: Accumulated Depreciation and Amortization 1 (318,524) (281,980) $ 269,833 $ 267,457 1 Includes accumulated amortization of internal-use software development costs which amounted to $113.6 million and $93.4 million as of December 31, 2023 and 2022, respectively. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table disaggregates revenue by source: Year Ended December 31, (In Thousands) 2023 2022 2021 Lease Revenues and Fees $ 1,399,514 $ 1,529,125 $ 1,633,489 Retail Sales 620,665 585,624 57,568 Non-Retail Sales 96,710 110,531 128,299 Franchise Royalties and Fees 22,312 23,376 25,129 Other 689 778 1,019 Total 1 $ 2,139,890 $ 2,249,434 $ 1,845,504 1 Includes revenues from Canadian operations of $17.2 million, $18.6 million and $22.7 million during the years ended December 31, 2023, 2022, and 2021, which are primarily lease revenues and fees. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Schedule of Lease, Cost | The Company’s total operating lease costs are comprised of the following: Year Ended December 31, (In Thousands) 2023 2022 2021 Operating Lease cost: Non-Cash Lease Expense classified within Other Operating Expenses, Net 1 118,759 111,452 91,467 Non-Cash Lease Expense classified within Restructuring Expenses, Net 2 851 1,161 1,616 Sublease Receipts 3 (1,663) (2,090) (2,442) Total Operating Lease cost $ 117,947 $ 110,523 $ 90,641 1 Includes short-term and variable lease costs, which are not significant. Short-term lease expense include lease terms of greater than one month, but not greater than 12 months. 2 Excludes right-of-use asset impairment charges of $3.1 million, $11.2 million and $4.2 million recognized during the years ended December 31, 2023, 2022 and 2021, respectively, which were recognized within restructuring expenses, net in the consolidated statements of earnings and within impairment of assets in the consolidated statements of cash flows. 3 |
Schedule of Supplemental Cash Flow Information | Additional information regarding the Company’s leasing activities is as follows: Year Ended December 31, (In Thousands) 2023 2022 2021 Cash paid for amounts included in measurement of Operating Lease Liabilities 130,221 130,273 111,555 Right-of-Use Assets obtained in exchange for new Operating Lease Liabilities 1 $ 114,564 $ 294,109 $ 133,528 1 During the year ended December 31, 2022, $160.2 million of the right-of-use assets obtained in exchange for new operating lease liabilities relates to the acquisition of BrandsMart U.S.A. The carrying value of these right-of-use assets was subsequently reduced by the $6.8 million value of the off-market element of the BrandsMart U.S.A. lease agreements, which is reflected in the amounts noted in the table above. |
Schedule of Weighted-Average Discount Rate and Weighted-Average Remaining Lease Term | Below is a summary of the weighted-average discount rate and weighted-average remaining lease term for operating leases: December 31, 2023 2022 Weighted Average Discount Rate 1 Weighted Average Remaining Lease Term (in years) Weighted Average Discount Rate Weighted Average Remaining Lease Term (in years) Operating Leases 4.7 % 6.0 4.1 % 6.3 |
Schedule of Operating Lease, Liability, Maturity | (In Thousands) Total 2024 $ 119,504 2025 110,368 2026 91,546 2027 77,169 2028 56,777 Thereafter 124,852 Total Future Undiscounted Cash Flows 1 580,216 Less: Interest 77,524 Present Value of Lease Liabilities $ 502,692 1 Future undiscounted cash flows do not include $6.0 million of future operating lease payments for leases that have not yet commenced. These leases will commence during 2024. |
Indebtedness (Tables)
Indebtedness (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Summary of Company's Credit Facilities | The following is a summary of the Company’s debt, net of applicable unamortized debt issuance costs: (In Thousands) December 31, 2023 December 31, 2022 Revolving Facility $ 25,000 $ 69,250 Term Loan, Due in Installments through April 2027 1 168,963 173,163 Total Outstanding Borrowings under the Credit Facility 193,963 242,413 Total Debt 193,963 242,413 Less: Current Maturities 6,388 23,450 Long-Term Debt $ 187,575 $ 218,963 1 Includes unamortized debt issuance costs of $0.6 million and $0.7 million at December 31, 2023 and December 31, 2022. The Company has included $2.2 million and $2.9 million of debt issuance costs as of December 31, 2023 and December 31, 2022, respectively, related to the revolving credit facility within prepaid expenses and other assets in the consolidated balance sheets. |
Schedule of Future Maturities of Long Term Debt and Capital Lease Obligations | The table below shows all scheduled maturities for borrowings outstanding under the Revolving Facility and Term Loan as of December 31, 2023: (In Thousands) Total 2024 $ 6,388 2025 8,575 2026 8,575 2027 1 170,425 Total $ 193,963 1 Amount includes $25.0 million of outstanding borrowings under the Revolving Facility as of December 31, 2023. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Summary of Income Tax Expense | The following is a summary of the Company’s income tax (benefit) expense: Year Ended December 31, (In Thousands) 2023 2022 2021 Current Income Tax (Benefit) Expense Federal $ 3,697 $ 152 $ 140 State 3,786 2,988 6,073 Foreign (162) (131) 998 7,321 3,009 7,211 Deferred Income Tax (Benefit) Expense: Federal (3,411) (4,417) 28,505 State (8,067) (8,074) 172 Foreign 276 19 48 (11,202) (12,472) 28,725 Income Tax (Benefit) Expense $ (3,881) $ (9,463) $ 35,936 |
Schedule of Deferred Income Tax Liabilities and Assets | Significant components of the Company’s deferred income tax liabilities and assets are as follows: December 31, (In Thousands) 2023 2022 Deferred Tax Liabilities: Lease Merchandise and Property, Plant and Equipment $ 151,687 $ 182,070 Operating Lease Right-of-Use Assets 116,372 114,868 Prepaid Expenses 4,578 5,412 Other, Net 5,476 5,697 Total Deferred Tax Liabilities 278,113 308,047 Deferred Tax Assets: Goodwill and Other Intangibles 49,104 55,733 Accrued Liabilities 16,893 16,614 Advance Payments 11,812 12,913 Operating Lease Liabilities 126,437 125,056 Net Operating Loss 8,207 15,436 Stock-Based Compensation 3,364 3,695 263A Inventory Capitalization 2,028 2,018 Other Comprehensive Income 449 — Other, Net 1,151 5,851 Total Deferred Tax Assets 219,445 237,316 Less Valuation Allowance 412 — Net Deferred Tax Liabilities $ 59,080 $ 70,731 |
Summary of Valuation Allowance | Activity in the Company's deferred tax asset valuation allowance is as follows: Year Ended (In Thousands) December 31, 2023 December 31, 2022 Beginning Balance $ — $ — Valuation allowance provided for taxes related to: State net operating loss carryforwards 412 — Ending Balance $ 412 $ — |
Schedule of Effective Tax Rate Differs from Statutory United States Federal Income Tax Rate | The Company’s effective tax rate differs from the statutory United States federal income tax rate as follows: Year Ended December 31, 2023 2022 2021 Statutory Rate 21.0 % 21.0 % 21.0 % Increases (Decreases) in United States Federal Taxes Resulting From: State Income Taxes, net of Federal Income Tax Benefit (38.9) 1.5 3.7 Nondeductible Officers Compensation (36.6) (9.1) 0.3 Permanent Differences (60.6) (2.0) 0.4 Remeasurement of net Deferred Tax Liabilities 504.6 34.1 0.2 Federal Tax Credits 125.2 15.1 (1.6) Stock-Based Compensation - Tax Deficiency (89.2) (1.6) 0.1 Valuation Allowance (39.0) — — Other, net (19.7) 5.2 0.5 Effective Tax Rate 366.8 % 64.2 % 24.6 % |
Summary of Activity Related to Uncertain Tax Positions | The following table summarizes the activity related to the Company’s uncertain tax positions: Year Ended December 31, (In Thousands) 2023 2022 2021 Balance at January 1, $ 439 $ 470 $ 683 Additions Based on Tax Positions Related to the Current Year — — — Additions for Tax Positions of Prior Years 281 109 — Prior Year Reductions — — (104) Statute Expirations (154) (140) (109) Settlements — — — Amounts Transferred to Former Parent — — — Balance at December 31, $ 566 $ 439 $ 470 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The following table summarizes restructuring charges incurred under the Company's restructuring programs: Year Ended December 31, (In Thousands) 2023 2022 2021 Right-of-Use Asset Impairment $ 3,121 $ 11,214 $ 4,162 Operating Lease Charges 7,129 7,150 4,827 Fixed Asset Impairment 967 5,032 658 Severance 2,096 3,137 262 Professional Advisory Fees 1,720 4,881 — Other Expenses 665 1,362 384 Gain on Sale of Store Properties (101) (59) (1,075) Total Restructuring Expenses, Net $ 15,597 $ 32,717 $ 9,218 |
Schedule of Restructuring Reserve | The following table summarizes the corresponding accrual balances as of December 31, 2023 and December 31, 2022 for the restructuring programs: (In Thousands) Severance Operating Lease Charges 1 Professional Advisory Fees Balance at December 31, 2022 $ 695 $ 2,200 $ 1,032 Restructuring Charges $ 2,096 $ 2,016 $ 1,720 Payments $ (2,620) $ (3,367) $ (2,748) Balance at December 31, 2023 $ 171 $ 849 $ 4 1 Operating lease charges payable at December 31, 2023 relate to accrued maintenance charges at various properties vacated in conjunction with the restructuring programs discussed herein. These liabilities are included within accounts payable and accrued expenses in the consolidated balance sheets. All other operating lease charges incurred during the year ended December 31, 2023 were expensed as incurred and are not reflected in this table as they do not impact the restructuring accrual. |
Segments (Tables)
Segments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Information on Segments and Reconciliation to Earnings Before Income Taxes from Continuing Operations | The Company does not evaluate performance or allocate resources based on segment asset data, and therefore total segment assets are not presented. Year Ended December 31, 2023 (In Thousands) Aaron's Business BrandsMart Elimination of Intersegment Revenues Total Lease Revenues and Fees $ 1,399,514 $ — $ — $ 1,399,514 Retail Sales 27,248 604,413 (10,996) 620,665 Non-Retail Sales 96,710 — — 96,710 Franchise Royalties and Fees 22,312 — — 22,312 Other 689 — — 689 Total $ 1,546,473 $ 604,413 $ (10,996) $ 2,139,890 Year Ended December 31, 2023 (In Thousands) Aaron's Business 1 BrandsMart Unallocated Corporate 2 Elimination Total Gross Profit $ 976,547 $ 143,660 $ — $ (888) $ 1,119,319 Earnings (Loss) Before Income Taxes 99,041 (5,029) (94,416) (654) (1,058) Depreciation and Amortization 3 75,221 14,244 876 — 90,341 Capital Expenditures 75,497 13,195 5,723 — 94,415 1 Earnings before income taxes for the Aaron's Business segment during the year ended December 31, 2023 included gains of $5.4 million related to a sale and leaseback transaction for five Company-owned Aaron's store properties. 2 The loss before income taxes for the Unallocated Corporate category during the year ended December 31, 2023 was impacted by restructuring charges of $15.6 million, BrandsMart U.S.A. acquisition-related costs of $3.6 million and separation-related costs of $0.2 million. 3 Excludes depreciation of lease merchandise, which is not included in the chief operating decision maker's measure of depreciation and amortization. Year Ended December 31, 2022 (In Thousands) Aaron's Business BrandsMart Elimination of Intersegment Revenues Total Lease Revenues and Fees $ 1,529,125 $ — $ — $ 1,529,125 Retail Sales 39,693 552,465 (6,534) 585,624 Non-Retail Sales 110,531 — — 110,531 Franchise Royalties and Fees 23,376 — — 23,376 Other 778 — — 778 Total $ 1,703,503 $ 552,465 $ (6,534) $ 2,249,434 Year Ended December 31, 2022 (In Thousands) Aaron's Business 1 BrandsMart 2 Unallocated Corporate 3 Elimination Total Gross Profit $ 1,061,266 $ 101,364 $ — $ (857) $ 1,161,773 Earnings (Loss) Before Income Taxes 122,220 (11,171) (125,021) (771) (14,743) Depreciation and Amortization 4 74,333 10,520 1,230 — 86,083 Capital Expenditures 98,305 3,499 6,176 — 107,980 1 Earnings before income taxes for the Aaron's Business segment during the year ended December 31, 2022 included gains of $8.5 million related to sale and leaseback transactions for seven Company-owned Aaron's store properties. 2 The loss before income taxes for the BrandsMart segment during the year ended December 31, 2022 was impacted by a one-time, non-cash charge for a fair value adjustment to the acquired merchandise inventories of $23.1 million. 3 The loss before income taxes for the Unallocated Corporate category during the year ended December 31, 2022 was impacted by restructuring charges of $32.7 million, BrandsMart U.S.A. acquisition-related costs of $14.6 million, a goodwill impairment charge of $12.9 million to fully write-off the goodwill balance of the Aaron's Business reporting unit and separation-related costs of $1.2 million. 4 Excludes depreciation of lease merchandise, which is not included in the chief operating decision maker's measure of depreciation and amortization. Year Ended December 31, 2021 (In Thousands) Aaron's Business BrandsMart Elimination of Intersegment Revenues Total Lease Revenues and Fees $ 1,633,489 $ — $ — $ 1,633,489 Retail Sales 57,568 — — 57,568 Non-Retail Sales 128,299 — — 128,299 Franchise Royalties and Fees 25,129 — — 25,129 Other 1,019 — — 1,019 Total $ 1,845,504 $ — $ — $ 1,845,504 Year Ended December 31, 2021 (In Thousands) Aaron's Business BrandsMart Unallocated Corporate 2 Elimination Total Gross Profit $ 1,159,489 $ — $ — $ — $ 1,159,489 Earnings (Loss) Before Income Taxes 223,448 — (77,578) — 145,870 Depreciation and Amortization 1 67,836 — 1,851 — 69,687 Capital Expenditures 85,053 — 7,651 — 92,704 1 Excludes depreciation of lease merchandise, which is not included in the chief operating decision maker's measure of depreciation and amortization. 2 |
Stock Compensation (Tables)
Stock Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock Options, Valuation Assumptions | The Company granted 273,000, 148,000, and 194,000 stock options during the years ended December 31, 2023, 2022, and 2021, respectively. The weighted-average fair value of options granted and the weighted-average assumptions used in the Black-Scholes-Merton option pricing model for such grants were as follows: 2023 2022 2021 Dividend Yield 4.17 % 2.10 % 1.84 % Expected Volatility 53.86 % 55.38 % 55.73 % Risk-free Interest Rate 4.17 % 1.90 % 0.87 % Expected Term (in years) 6.0 6.0 6.0 Fair Value of Stock Options Granted $ 4.58 $ 9.45 $ 9.56 The assumptions used in the Monte Carlo valuation for the TSR performance share units granted during the years ended December 31, 2023 and 2022 were as follows: 2023 2022 Risk-free Interest Rate 4.61 % 1.72 % Expected Dividend Yield 4.17 % 2.10 % Expected Volatility 57.35 % 60.68 % Expected Term (in years) 2.82 years 2.85 years Fair Value of TSR Performance Share Units Granted $ 15.81 $ 32.09 |
Summary of Stock Option Activity | The table below summarizes the Company's stock option activity for the year ended December 31, 2023: Options Weighted Average Weighted Average Aggregate Weighted Outstanding at January 1, 2023 879 $ 15.45 Granted 273 12.00 Exercised (8) 10.78 Forfeited/expired (23) 14.80 Outstanding at December 31, 2023 1,121 14.66 6.61 $ 527 $ 5.77 Expected to Vest 400 15.61 8.17 — 6.44 Exercisable at December 31, 2023 708 14.16 5.42 527 5.40 |
Summary Information about Stock Options Outstanding | The following table summarizes information about the Company's stock options outstanding at December 31, 2023: Options Outstanding Options Exercisable Range of Exercise Number Outstanding December 31, 2023 (In Thousands) Weighted Average Remaining Contractual Weighted Average Number Exercisable December 31, 2023 (In Thousands) Weighted Average $0.00-$10.00 124 2.61 $ 7.19 124 $ 7.19 $10.01-$20.00 672 6.88 12.67 411 13.09 $20.01-$30.00 325 7.60 21.63 173 21.67 $0.00-$30.00 1,121 6.61 14.66 708 14.16 |
Summary of Restricted Stock Activity | The following table summarizes information about restricted stock activity during 2023: Restricted Stock Weighted Average Non-vested at January 1, 2023 857 $ 21.16 Granted 683 11.99 Vested (326) 19.30 Forfeited/unearned (110) 17.04 Non-vested at December 31, 2023 1,104 16.44 |
Summary of Performance Share Units | The following table summarizes information about the Company's performance share unit activity during the year ended December 31, 2023: Performance Share Units Weighted Average Non-vested at January 1, 2023 485 $ 23.17 Granted 398 13.91 Vested (189) 18.42 Forfeited/unearned (46) 19.82 Non-vested at December 31, 2023 648 16.18 |
Business and Summary of Signi_4
Business and Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | Dec. 31, 2023 USD ($) store | Apr. 01, 2022 USD ($) |
Significant Accounting Policies [Line Items] | ||
Common stock conversion ratio | 0.5 | |
Approximate number of stores | 1,240 | |
BrandsMart | ||
Significant Accounting Policies [Line Items] | ||
Number of retail stores | 11 | |
BrandsMart | ||
Significant Accounting Policies [Line Items] | ||
Percentage of interests acquired | 100% | |
Cash Consideration to BrandsMart U.S.A. | $ | $ 230,000 | $ 230,000 |
Business and Summary of Signi_5
Business and Summary of Significant Accounting Policies - Segment Reporting (Details) | 3 Months Ended | 12 Months Ended | 21 Months Ended |
Mar. 31, 2022 segment | Dec. 31, 2023 store | Dec. 31, 2023 store | |
Significant Accounting Policies [Line Items] | |||
Number of operating segments | 1 | 2 | |
Number of reportable segments | 1 | 2 | |
BrandsMart | |||
Significant Accounting Policies [Line Items] | |||
Number of operating segments | 2 | ||
Number of reportable segments | 2 |
Business and Summary of Signi_6
Business and Summary of Significant Accounting Policies - Revenue Recognition (Details) - Sales and Lease Ownership | Dec. 31, 2023 |
Agreement One | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Lease agreement period | 12 months |
Agreement Two | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Lease agreement period | 18 months |
Agreement Three | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Lease agreement period | 24 months |
Business and Summary of Signi_7
Business and Summary of Significant Accounting Policies - Calculation of Dilutive Stock Awards (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | |||
Weighted Average Shares Outstanding (in shares) | 30,778 | 30,881 | 32,992 |
Dilutive Effect of Share-Based Awards (in shares) | 327 | 0 | 730 |
Weighted Average Shares Outstanding Assuming Dilution (in shares) | 31,105 | 30,881 | 33,722 |
Business and Summary of Signi_8
Business and Summary of Significant Accounting Policies - (Loss) Earnings Per Share Narrative (Details) - shares shares in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | ||
Anti-dilutive Securities excluded from the computation of earnings per share assuming dilution (in shares) | 1.3 | 0.1 |
Business and Summary of Signi_9
Business and Summary of Significant Accounting Policies - Lease Merchandise (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Significant Accounting Policies [Line Items] | |||
Lease merchandise, net of accumulated depreciation and allowances | $ 622,262 | $ 693,795 | |
Costs capitalized to lease merchandise | 54,000 | 55,700 | $ 55,000 |
Capitalized overhead costs included in lease merchandise | $ 55,900 | 55,100 | |
Customer Lease Receivables | |||
Significant Accounting Policies [Line Items] | |||
Threshold period past due for write-off of lease receivable | 60 days | ||
Manufacturing | Operating Segments | |||
Significant Accounting Policies [Line Items] | |||
Inventory, including raw materials and work-in-process | $ 8,700 | 12,900 | |
BrandsMart | Customer Lease Receivables | |||
Significant Accounting Policies [Line Items] | |||
Threshold period past due for write-off of lease receivable | 90 days | ||
Minimum | |||
Significant Accounting Policies [Line Items] | |||
Lease merchandise, term before commencing depreciation (or earlier) | 12 months | ||
Maximum | |||
Significant Accounting Policies [Line Items] | |||
Lease merchandise, term before commencing depreciation (or earlier) | 24 months | ||
Merchandise on Lease, net of Accumulated Depreciation and Allowances | |||
Significant Accounting Policies [Line Items] | |||
Lease merchandise, net of accumulated depreciation and allowances | $ 419,531 | 446,923 | |
Merchandise on Lease, net of Accumulated Depreciation and Allowances | Minimum | |||
Significant Accounting Policies [Line Items] | |||
Lease merchandise useful life | 12 months | ||
Merchandise on Lease, net of Accumulated Depreciation and Allowances | Maximum | |||
Significant Accounting Policies [Line Items] | |||
Lease merchandise useful life | 24 months | ||
Merchandise Not on Lease, net of Accumulated Depreciation and Allowances | |||
Significant Accounting Policies [Line Items] | |||
Lease merchandise useful life | 36 months | ||
Lease merchandise, net of accumulated depreciation and allowances | $ 202,731 | $ 246,872 |
Business and Summary of Sign_10
Business and Summary of Significant Accounting Policies - Allowance for Lease Merchandise Write-offs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | |||
Beginning Balance | $ 13,894 | $ 12,339 | $ 11,599 |
Merchandise Written off, net of Recoveries | (82,477) | (96,009) | (67,148) |
Provision for Write-offs | 81,495 | 97,564 | 67,888 |
Ending Balance | $ 12,912 | $ 13,894 | $ 12,339 |
Business and Summary of Sign_11
Business and Summary of Significant Accounting Policies - Merchandise Inventories Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
BrandsMart | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Adjustments to acquired merchandise inventories | $ 23.1 |
Business and Summary of Sign_12
Business and Summary of Significant Accounting Policies - Retail Related Inventory, Merchandise (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | |||
Merchandise Inventories, gross | $ 91,093 | $ 96,945 | |
Reserve for Merchandise Inventories | (921) | (981) | $ 0 |
Merchandise Inventories, net | $ 90,172 | $ 95,964 |
Business and Summary of Sign_13
Business and Summary of Significant Accounting Policies - Retail Related Inventory, Components of the Reserve for Merchandise Inventories (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | ||
Beginning Balance | $ 981 | $ 0 |
Merchandise Written off | (618) | 0 |
Provision for Write-offs | 558 | 981 |
Ending Balance | $ 921 | $ 981 |
Business and Summary of Sign_14
Business and Summary of Significant Accounting Policies - Shipping and Handling Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Costs capitalized to lease merchandise | $ 54 | $ 55.7 | $ 55 |
Shipping and Handling | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Shipping and handling costs | 64.1 | 70.1 | 60.4 |
Costs capitalized to lease merchandise | $ 23.3 | $ 27.4 | $ 25.4 |
Business and Summary of Sign_15
Business and Summary of Significant Accounting Policies - Advertising Expense (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||
Prepaid advertising asset | $ 0.1 | $ 4.6 |
Business and Summary of Sign_16
Business and Summary of Significant Accounting Policies - Schedule of Advertising Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | |||
Advertising Costs, Gross | $ 75,153 | $ 74,864 | $ 80,602 |
Less: Cooperative Advertising Considerations | (33,792) | (35,743) | (26,951) |
Advertising Costs, Net | $ 41,361 | $ 39,121 | $ 53,651 |
Business and Summary of Sign_17
Business and Summary of Significant Accounting Policies - Acquisition Related Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Business Combination, Separately Recognized Transactions [Line Items] | |||
Acquisition-Related Costs | $ 3,638 | $ 14,616 | $ 0 |
BrandsMart | |||
Business Combination, Separately Recognized Transactions [Line Items] | |||
Acquisition-Related Costs | $ 3,600 | $ 14,600 |
Business and Summary of Sign_18
Business and Summary of Significant Accounting Policies - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | |||
Interest | $ 15,973 | $ 6,618 | $ 991 |
Income Taxes | $ 11,680 | $ 5,498 | $ 9,654 |
Business and Summary of Sign_19
Business and Summary of Significant Accounting Policies - Accounts Receivable Net of Allowances (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowances | $ 39,782 | $ 38,191 |
Customers | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowances | 8,737 | 9,721 |
Corporate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowances | 23,660 | 20,597 |
Franchisee | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowances | $ 7,385 | $ 7,873 |
Customer Lease Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Threshold period past due for write-off of lease receivable | 60 days |
Business and Summary of Sign_20
Business and Summary of Significant Accounting Policies - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning Balance | $ 8,895 | $ 7,163 | $ 7,613 |
Accounts Written Off, net of Recoveries | (39,755) | (39,728) | (28,414) |
Accounts Receivable Provision | 39,889 | 41,460 | 27,964 |
Ending Balance | $ 9,029 | $ 8,895 | $ 7,163 |
Business and Summary of Sign_21
Business and Summary of Significant Accounting Policies - Components of the Accounts Receivable Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | |||
Bad Debt Expense | $ 355 | $ 124 | |
Provision for Returns and Uncollectible Renewal Payments | 39,534 | 41,336 | |
Accounts Receivable Provision | $ 39,889 | $ 41,460 | $ 27,964 |
Business and Summary of Sign_22
Business and Summary of Significant Accounting Policies - Property, Plant and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Depreciation expense for property, plant and equipment | $ 79.9 | $ 76.8 | $ 64.2 |
Amortization expense | 10.3 | 9.3 | 5.5 |
Software | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Amortization expense | $ 19.6 | $ 20.8 | $ 18.6 |
Minimum | Buildings and Improvements | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Property, plant and equipment, useful life | 5 years | ||
Minimum | Other depreciable property and equipment | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Property, plant and equipment, useful life | 1 year | ||
Minimum | Software | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Property, plant and equipment, useful life | 5 years | ||
Maximum | Buildings and Improvements | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Property, plant and equipment, useful life | 20 years | ||
Maximum | Other depreciable property and equipment | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Property, plant and equipment, useful life | 15 years | ||
Maximum | Software | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Property, plant and equipment, useful life | 10 years | ||
Maximum | Software updates | |||
Impaired Long-Lived Assets Held and Used [Line Items] | |||
Property, plant and equipment, useful life | 1 month |
Business and Summary of Sign_23
Business and Summary of Significant Accounting Policies - Prepaid Expenses and Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Restructuring Cost and Reserve [Line Items] | ||
Prepaid Expenses | $ 14,482 | $ 20,218 |
Insurance Related Assets | 33,035 | 25,103 |
Company-Owned Life Insurance | 15,231 | 13,443 |
Deferred Tax Assets | 24,137 | 16,277 |
Other Assets | 18,512 | 21,395 |
Prepaid Expense and Other Assets | 105,397 | 96,436 |
Assets held for sale | 900 | 1,900 |
BrandsMart | ||
Restructuring Cost and Reserve [Line Items] | ||
Restricted Cash | $ 1,600 | $ 1,600 |
Business and Summary of Sign_24
Business and Summary of Significant Accounting Policies - Derivative Instruments (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Mar. 31, 2023 | |
Debt Instrument [Line Items] | ||
Derivative fixed interest rate | 3.87% | |
Interest Rate Swap | ||
Debt Instrument [Line Items] | ||
Notional amount | $ 100 | |
Net gains AOCI to interest expense | $ 0.9 | |
Interest Rate Swap | Designated as Hedging Instrument | ||
Debt Instrument [Line Items] | ||
Derivative liability | $ 0.5 |
Business and Summary of Sign_25
Business and Summary of Significant Accounting Policies - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | $ (1,396) | $ (739) |
Other Comprehensive (Loss) Income, net of Tax | 41 | (657) |
Ending balance | (1,355) | (1,396) |
Derivative Instruments | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | (17) | 0 |
Other Comprehensive (Loss) Income, net of Tax | (425) | (17) |
Ending balance | (442) | (17) |
Foreign Currency | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | (1,379) | (739) |
Other Comprehensive (Loss) Income, net of Tax | 466 | (640) |
Ending balance | $ (913) | $ (1,379) |
Business and Summary of Sign_26
Business and Summary of Significant Accounting Policies - Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||
Accounts Payable | $ 134,191 | $ 106,966 |
Estimated Claims Liability Costs | 64,082 | 58,549 |
Accrued Salaries and Benefits | 39,058 | 33,932 |
Accrued Real Estate and Sales Taxes | 20,146 | 24,030 |
Other Accrued Expenses and Liabilities | 34,698 | 40,566 |
Accounts Payable and Accrued Liabilities | $ 292,175 | $ 264,043 |
Business and Summary of Sign_27
Business and Summary of Significant Accounting Policies - Asset Retirement Obligation (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Accounts Payable and Accrued Liabilities | ||
Significant Accounting Policies [Line Items] | ||
Asset retirement obligations | $ 2.1 | $ 2.2 |
Business and Summary of Sign_28
Business and Summary of Significant Accounting Policies - Foreign Currency (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Segment Reporting Information [Line Items] | ||
Assets | $ 1,826,576 | $ 1,858,463 |
Operating Segments | Canada | Aaron's Business | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 13,400 | $ 13,100 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Apr. 01, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 55,750 | $ 13,134 | $ 54,710 | |
BrandsMart | ||||
Business Acquisition [Line Items] | ||||
Cash consideration to BrandsMart U.S.A. | 230,000 | $ 230,000 | ||
Aggregate Consideration Transferred | 288,374 | 288,374 | ||
Goodwill | $ 55,750 | $ 54,710 | ||
Franchisee Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Aggregate Consideration Transferred | 10,600 | |||
Goodwill | $ 5,600 |
Acquisitions - BrandsMart Acqui
Acquisitions - BrandsMart Acquisition (Details) - USD ($) $ in Thousands | 12 Months Ended | 21 Months Ended | ||||
Dec. 31, 2023 | Apr. 01, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2021 | |
Estimated Fair Value of Identifiable Assets Acquired and Liabilities Assumed | ||||||
Goodwill | $ 55,750 | $ 55,750 | $ 54,710 | $ 55,750 | $ 13,134 | |
Acquisition Accounting Adjustments | 1,040 | $ (7,665) | ||||
BrandsMart | ||||||
Business Acquisition [Line Items] | ||||||
Cash Consideration to BrandsMart U.S.A. | 230,000 | $ 230,000 | ||||
Measurement Period adjustments, cash consideration | 0 | |||||
Acquired Cash | 15,952 | 15,952 | 15,952 | 15,952 | ||
Measurement Period adjustments, acquired cash | 0 | |||||
Estimated Excess Working Capital, net of Cash | 35,599 | 35,599 | 35,599 | 35,599 | ||
Measurement Period adjustments, estimated excess working capital, net of Cash | 0 | |||||
Non-Cash Off-Market Lease Agreement | 6,823 | 6,823 | 6,823 | 6,823 | ||
Measurement period adjustments non-cash off-market lease agreement | 0 | |||||
Aggregate Consideration Transferred | 288,374 | 288,374 | ||||
Measurement Period adjustments, consideration transferred | 0 | |||||
Measurement Period adjustments, total purchase consideration, net of cash acquired | 0 | |||||
Estimated Fair Value of Identifiable Assets Acquired and Liabilities Assumed | ||||||
Accounts Receivable | 4,310 | 4,310 | 4,310 | 4,310 | ||
Measurement Period adjustments, accounts receivable | 0 | |||||
Merchandise Inventories | 124,237 | 124,064 | 124,237 | 124,237 | ||
Measurement period adjustments, merchandise inventories | 173 | |||||
Property, Plant and Equipment | 20,692 | 22,053 | 20,692 | 20,692 | ||
Measurement Period adjustments, property, plant and equipment | (1,361) | |||||
Operating Lease Right-of-Use Assets | 160,210 | 160,210 | 160,210 | 160,210 | ||
Measurement Period adjustments, operating lease right-of-use assets | 0 | |||||
Other Intangibles | 122,950 | 122,950 | 122,950 | 122,950 | ||
Measurement Period adjustments, intangibles | 0 | |||||
Prepaid Expenses and Other Assets | 8,969 | 9,049 | 8,969 | 8,969 | ||
Measurement Period adjustments, prepaid expenses and other assets | (80) | |||||
Total Identifiable Assets Acquired | 441,368 | 442,636 | 441,368 | 441,368 | ||
Measurement Period adjustments, total identifiable assets acquired | (1,268) | |||||
Accounts Payable and Accrued Expenses | 23,290 | 25,340 | 23,290 | 23,290 | ||
Measurement Period adjustments, accounts payable and accrued expenses | (2,050) | |||||
Customer Deposits and Advance Payments | 27,154 | 25,332 | 27,154 | 27,154 | ||
Measurement Period adjustments, customer deposits and advance payments | 1,822 | |||||
Operating Lease Liabilities | 158,712 | 158,712 | 158,712 | 158,712 | ||
Measurement Period adjustments, operating lease liabilities | 0 | |||||
Debt | 15,540 | 15,540 | 15,540 | 15,540 | ||
Measurement Period adjustments, debt | 0 | |||||
Total Liabilities Assumed | 224,696 | 224,924 | 224,696 | 224,696 | ||
Measurement Period adjustments, total liabilities assumed | (228) | |||||
Net Assets Acquired | 216,672 | 217,712 | 216,672 | 216,672 | ||
Measurement Period adjustments, net assets acquired | (1,040) | |||||
Goodwill | 55,750 | 54,710 | 55,750 | 55,750 | ||
Acquisition Accounting Adjustments | 1,040 | |||||
Total Estimated Fair Value of Net Assets Acquired | $ 272,422 | $ 272,422 | $ 272,422 | 272,422 | ||
Measurement Period adjustments, total estimated fair value of net assets acquired | $ 0 |
Goodwill and Intangibles - Narr
Goodwill and Intangibles - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill | $ 55,750 | $ 54,710 | $ 13,134 | |
Goodwill, purchase accounting adjustments | 1,040 | (7,665) | ||
Goodwill, impairment loss | 0 | 12,933 | 0 | |
Amortization expense | 10,300 | 9,300 | 5,500 | |
Aaron's Business | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill | 0 | 0 | $ 13,134 | |
Goodwill, purchase accounting adjustments | $ 0 | $ (107) | ||
Goodwill, impairment loss | $ 12,933 | |||
Customer Relationships | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated useful lives of intangibles | 3 years | |||
Reacquired Franchise Rights | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated useful lives of intangibles | 10 years | |||
Trade Names | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated useful lives of intangibles | 20 years | |||
Customer List | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated useful lives of intangibles | 4 years | |||
Minimum | Non-Compete Agreements | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated useful lives of intangibles | 1 year | |||
Minimum | Expanded Customer Base | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated useful lives of intangibles | 2 years | |||
Maximum | Non-Compete Agreements | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated useful lives of intangibles | 5 years | |||
Maximum | Expanded Customer Base | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated useful lives of intangibles | 6 years |
Goodwill and Intangibles - Summ
Goodwill and Intangibles - Summary of Carrying Value of Goodwill by Operating Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | 21 Months Ended | ||
Sep. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2023 | |
Goodwill [Roll Forward] | |||||
Goodwill, Beginning Balance | $ 54,710 | $ 13,134 | |||
Acquisitions | 0 | 62,268 | |||
Currency Translation Adjustments | 0 | (94) | |||
Acquisition Accounting Adjustments | 1,040 | (7,665) | |||
Impairment Loss | 0 | (12,933) | $ 0 | ||
Goodwill, Ending Balance | 55,750 | 54,710 | 13,134 | $ 55,750 | |
Aaron's Business | |||||
Goodwill [Roll Forward] | |||||
Goodwill, Beginning Balance | 0 | 13,134 | |||
Acquisitions | 0 | 0 | |||
Currency Translation Adjustments | 0 | (94) | |||
Acquisition Accounting Adjustments | 0 | (107) | |||
Impairment Loss | $ (12,933) | ||||
Goodwill, Ending Balance | 0 | 0 | 13,134 | 0 | |
BrandsMart | |||||
Goodwill [Roll Forward] | |||||
Goodwill, Beginning Balance | 54,710 | ||||
Acquisition Accounting Adjustments | 1,040 | ||||
Goodwill, Ending Balance | 55,750 | 55,750 | |||
BrandsMart | Reporting Units, Excluding Leasing | |||||
Goodwill [Roll Forward] | |||||
Goodwill, Beginning Balance | 28,193 | 0 | |||
Acquisitions | 0 | 62,268 | |||
Currency Translation Adjustments | 0 | 0 | |||
Acquisition Accounting Adjustments | 1,040 | (34,075) | |||
Impairment Loss | 0 | ||||
Goodwill, Ending Balance | 29,233 | 28,193 | 0 | 29,233 | |
BrandsMart | Brands Mart Leasing | |||||
Goodwill [Roll Forward] | |||||
Goodwill, Beginning Balance | 26,517 | 0 | |||
Acquisitions | 0 | 0 | |||
Currency Translation Adjustments | 0 | 0 | |||
Acquisition Accounting Adjustments | 0 | 26,517 | |||
Impairment Loss | 0 | ||||
Goodwill, Ending Balance | $ 26,517 | $ 26,517 | $ 0 | $ 26,517 |
Goodwill and Intangibles - Su_2
Goodwill and Intangibles - Summary of Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 128,149 | $ 130,596 |
Accumulated Amortization | (19,991) | (12,068) |
Net | 108,158 | 118,528 |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 209 | 696 |
Accumulated Amortization | (164) | (455) |
Net | 45 | 241 |
Reacquired Franchise Rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 4,122 | 5,440 |
Accumulated Amortization | (2,976) | (3,539) |
Net | 1,146 | 1,901 |
Non-Compete Agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 256 | 320 |
Accumulated Amortization | (152) | (111) |
Net | 104 | 209 |
Expanded Customer Base | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 862 | 1,440 |
Accumulated Amortization | (818) | (1,157) |
Net | 44 | 283 |
Trade Names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 108,000 | 108,000 |
Accumulated Amortization | (9,450) | (4,050) |
Net | 98,550 | 103,950 |
Customer List | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 14,700 | 14,700 |
Accumulated Amortization | (6,431) | (2,756) |
Net | $ 8,269 | $ 11,944 |
Goodwill and Intangibles - Esti
Goodwill and Intangibles - Estimated Future Amortization Expense (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 | $ 9,776 |
2025 | 9,489 |
2026 | 6,512 |
2027 | 5,432 |
2028 | $ 5,400 |
Fair Value Measurement - Summar
Fair Value Measurement - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Recurring Basis - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Level 1 | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Deferred Compensation Liability | $ 0 | $ 0 |
Level 1 | Interest Rate Swap | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Interest Rate Swap Liability | 0 | 0 |
Level 2 | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Deferred Compensation Liability | (10,574) | (8,621) |
Level 2 | Interest Rate Swap | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Interest Rate Swap Liability | (468) | 0 |
Level 3 | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Deferred Compensation Liability | 0 | 0 |
Level 3 | Interest Rate Swap | ||
Fair Value Assets Liabilities Measured On Recurring Basis [Line Items] | ||
Interest Rate Swap Liability | $ 0 | $ 0 |
Fair Value Measurement - Narrat
Fair Value Measurement - Narrative (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Interest Rate Swap | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Notional amount | $ 100 |
Property, Plant and Equipment -
Property, Plant and Equipment - Summary of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 588,357 | $ 549,437 |
Less: Accumulated Depreciation and Amortization | (318,524) | (281,980) |
Property, plant and equipment, net | 269,833 | 267,457 |
Internal-use software development cost, accumulated amortization | 113,600 | 93,400 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 10,043 | 11,740 |
Buildings and Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 44,013 | 43,309 |
Leasehold Improvements and Signs | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 155,912 | 134,312 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 103,067 | 96,543 |
Fixtures and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 102,848 | 105,362 |
Software - Internal Use | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 164,262 | 143,091 |
Construction in Progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 8,212 | $ 15,080 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation Of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 2,139,890 | $ 2,249,434 | $ 1,845,504 |
Lease Revenues and Fees | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 1,399,514 | 1,529,125 | 1,633,489 |
Lease Revenues and Fees | Canada | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 17,200 | 18,600 | 22,700 |
Retail | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 620,665 | 585,624 | 57,568 |
Non-Retail | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 96,710 | 110,531 | 128,299 |
Franchise Royalties and Fees | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 22,312 | 23,376 | 25,129 |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 689 | $ 778 | $ 1,019 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) store | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 2,139,890 | $ 2,249,434 | $ 1,845,504 |
Return asset | 2,500 | 3,000 | |
Allowance for sales returns | $ 3,400 | 4,000 | |
Franchise operations agreement, initial term | 10 years | ||
Franchise operations agreement, number of renewal options | store | 1 | ||
Franchise operations agreement, renewal term | 10 years | ||
Leases | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 24,800 | 27,200 | 27,300 |
Franchise Royalties and Fees | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 22,312 | 23,376 | 25,129 |
Franchise Royalties and Fees | Transferred over Time | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 17,800 | $ 18,600 | $ 19,800 |
Sales and Lease Ownership and HomeSmart | |||
Disaggregation of Revenue [Line Items] | |||
Royalty payment rate | 6% | ||
Agreement One | Sales and Lease Ownership | |||
Disaggregation of Revenue [Line Items] | |||
Lease agreement period | 12 months | ||
Agreement Two | Sales and Lease Ownership | |||
Disaggregation of Revenue [Line Items] | |||
Lease agreement period | 18 months | ||
Agreement Three | Sales and Lease Ownership | |||
Disaggregation of Revenue [Line Items] | |||
Lease agreement period | 24 months |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 USD ($) sale-leasebackTransaction store | Dec. 31, 2022 USD ($) sale-leasebackTransaction store | |
Lessee, Lease, Description [Line Items] | ||
Net proceeds from sale and leaseback transactions | $ | $ 9.1 | $ 12.9 |
Other operating expense | ||
Lessee, Lease, Description [Line Items] | ||
Gain related to the sale and leaseback transaction | $ | $ 5.4 | $ 8.5 |
BrandsMart | ||
Lessee, Lease, Description [Line Items] | ||
Renewal term | 20 years | |
Sale leaseback, number of properties | sale-leasebackTransaction | 1 | 4 |
Company operated stores | store | 6 | |
BrandsMart | Sale and leaseback transactions | ||
Lessee, Lease, Description [Line Items] | ||
Company operated stores | store | 5 | 7 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Renewal term | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Renewal term | 20 years |
Leases - Total Lease Expense (D
Leases - Total Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Lessee, Lease, Description [Line Items] | |||
Sublease Receipts | $ (1,663) | $ (2,090) | $ (2,442) |
Total Operating Lease cost | 117,947 | 110,523 | 90,641 |
Right-of-use asset, impairment charges | 3,100 | 11,200 | 4,200 |
Future sublease rental income in 2024 | 1,200 | ||
Future sublease rental income in 2025 | 900 | ||
Future sublease rental income in 2026 | 500 | ||
Future sublease rental income in 2027 | 100 | ||
Future sublease rental income in 2028 | 100 | ||
Future sublease rental income in thereafter | 100 | ||
Non-Cash Lease Expense classified within Other Operating Expenses, Net | |||
Lessee, Lease, Description [Line Items] | |||
Non-Cash Lease Expense | 118,759 | 111,452 | 91,467 |
Non-Cash Lease Expense classified within Restructuring Expenses, Net | |||
Lessee, Lease, Description [Line Items] | |||
Non-Cash Lease Expense | $ 851 | $ 1,161 | $ 1,616 |
Leases - Leasing Activities (De
Leases - Leasing Activities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Lessee, Lease, Description [Line Items] | |||
Cash paid for amounts included in measurement of Operating Lease Liabilities | $ 130,221 | $ 130,273 | $ 111,555 |
Right-of-Use Assets obtained in exchange for new Operating Lease Liabilities | 114,564 | $ 294,109 | $ 133,528 |
BrandsMart | |||
Lessee, Lease, Description [Line Items] | |||
Right-of-Use Assets obtained in exchange for new Operating Lease Liabilities | 160,200 | ||
Off-Market lease, unfavorable | $ 6,800 |
Leases - Summary of the Weighte
Leases - Summary of the Weighted-Average Discount Rate and Weighted-Average Remaining Lease Term (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Weighted Average Discount Rate | ||
Operating Leases | 4.70% | 4.10% |
Weighted Average Remaining Lease Term (in years) | ||
Operating Leases | 6 years | 6 years 3 months 18 days |
Leases - Operating Lease Liabil
Leases - Operating Lease Liability (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Operating Leases | ||
2024 | $ 119,504 | |
2025 | 110,368 | |
2026 | 91,546 | |
2027 | 77,169 | |
2028 | 56,777 | |
Thereafter | 124,852 | |
Total Undiscounted Cash Flows | 580,216 | |
Less: Interest | 77,524 | |
Present Value of Lease Liabilities | 502,692 | $ 496,401 |
Future operating lease payments, lease not yet commended | $ 6,000 |
Indebtedness - Summary of Compa
Indebtedness - Summary of Company's Credit Facilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Total | $ 193,963 | $ 242,413 |
Less: Current Maturities | 6,388 | 23,450 |
Long-Term Debt | 187,575 | 218,963 |
Credit Facility | ||
Debt Instrument [Line Items] | ||
Total | 193,963 | 242,413 |
Revolving Facility | Credit Facility | ||
Debt Instrument [Line Items] | ||
Total | 25,000 | 69,250 |
Revolving Facility | Credit Facility | Fixed-Rate Long-Term Debt | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs deferred | 600 | 700 |
Revolving Facility | Credit Facility | Prepaid expenses and other assets | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs deferred | 2,200 | 2,900 |
Term Loan | Credit Facility | ||
Debt Instrument [Line Items] | ||
Total | $ 168,963 | $ 173,163 |
Indebtedness - Narrative (Detai
Indebtedness - Narrative (Details) - USD ($) | 24 Months Ended | 36 Months Ended | ||||||
Apr. 01, 2022 | Dec. 31, 2024 | Dec. 31, 2027 | Feb. 23, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Nov. 10, 2021 | |
Debt Instrument [Line Items] | ||||||||
Long-Term debt | $ 193,963,000 | $ 242,413,000 | ||||||
Term Loan | Forecast | ||||||||
Debt Instrument [Line Items] | ||||||||
Percentage of original principal amount amortized | 2.50% | 5% | ||||||
Swingline Loans on Customary Terms | Progressive Subsidiary | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 35,000,000 | |||||||
Franchise Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Event of default, loan due In full, term | 90 days | |||||||
Debt term | 364 days | |||||||
Debt instrument, extension period | 364 days | |||||||
Debt instrument, covenant, maximum EBITDA ratio | 2.75 | |||||||
Debt instrument, covenant, minimum fixed charge coverage ratio | 1.75 | |||||||
Revolving Facility | Revolving Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Short-term debt, weighted average interest rate | 7.08% | |||||||
Letter of Credit | Progressive Subsidiary | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 35,000,000 | |||||||
Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-Term debt | $ 193,963,000 | 242,413,000 | ||||||
Basis spread, base rate below SOFR | 1% | |||||||
Credit Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 1.50% | |||||||
Credit Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 2.25% | |||||||
Credit Facility | Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-Term debt | 169,500,000 | 173,900,000 | ||||||
Credit Facility | Franchise Loan Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 1.50% | |||||||
Credit Facility | Franchise Loan Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, basis spread on variable rate | 2.25% | |||||||
Credit Facility | Revolving Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-Term debt | 25,000,000 | $ 69,250,000 | ||||||
Credit Facility | Revolving Facility | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit, unused capacity, commitment fee percentage | 0.20% | |||||||
Credit Facility | Revolving Facility | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit, unused capacity, commitment fee percentage | 0.30% | |||||||
Credit Facility | Revolving Facility | Previous Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 250,000,000 | |||||||
Credit Facility | Revolving Facility | Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 175,000,000 | |||||||
Credit Facility | Revolving Facility | Revolving Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | 375,000,000 | 375,000,000 | ||||||
Credit Facility | Revolving Facility | Revolving Facility | Subsequent Event | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 275,000,000 | |||||||
Credit Facility | Revolving Facility | BrandsMart U.S.A. Revolving Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | 117,000,000 | |||||||
Credit Facility | Revolving Facility | Previous Franchise Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Franchise loan facility | $ 15,000,000 | |||||||
Credit Facility | Revolving Facility | Franchise Loan Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Franchise loan facility | $ 12,500,000 | $ 10,000,000 |
Indebtedness - Future Maturitie
Indebtedness - Future Maturities of Long Term Debt and Capital Lease Obligations (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Maturities of Long-term Debt [Abstract] | ||
2024 | $ 6,388 | |
2025 | 8,575 | |
2026 | 8,575 | |
2027 | 170,425 | |
Total | 193,963 | $ 242,413 |
Line of Credit | ||
Maturities of Long-term Debt [Abstract] | ||
Total | 193,963 | 242,413 |
Revolving Facility | Line of Credit | ||
Maturities of Long-term Debt [Abstract] | ||
Total | 25,000 | $ 69,250 |
Debt Instrument [Line Items] | ||
Revolving facility | $ 25,000 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 01, 2022 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | |||||
Deferred tax asset | $ 219,445 | $ 237,316 | |||
Deferred state income tax expense (benefit) | 8,067 | 8,074 | $ (172) | ||
Accrued interest and penalties | 700 | 500 | 500 | ||
Income tax, interest and penalties | 0 | 0 | 0 | ||
Income tax, accrued interest and penalties | 200 | 200 | $ 200 | ||
BrandsMart | |||||
Operating Loss Carryforwards [Line Items] | |||||
Deferred tax asset | $ 1,100 | ||||
Deferred state income tax expense (benefit) | 5,300 | $ 5,100 | |||
Federal Tax | |||||
Operating Loss Carryforwards [Line Items] | |||||
Federal operating loss carryforwards not subject to expiration | 200 | ||||
State Tax | |||||
Operating Loss Carryforwards [Line Items] | |||||
Federal operating loss carryforwards not subject to expiration | 8,200 | ||||
Tax credit carryforward | $ 800 | ||||
Tax credit carryforward, valuation allowance | $ 400 |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current Income Tax (Benefit) Expense | |||
Federal | $ 3,697 | $ 152 | $ 140 |
State | 3,786 | 2,988 | 6,073 |
Foreign | (162) | (131) | 998 |
Current Income Tax Expense | 7,321 | 3,009 | 7,211 |
Deferred Income Tax (Benefit) Expense: | |||
Federal | (3,411) | (4,417) | 28,505 |
State | (8,067) | (8,074) | 172 |
Foreign | 276 | 19 | 48 |
Deferred Income Tax Expense (Benefit) | (11,202) | (12,472) | 28,725 |
Income Tax (Benefit) Expense | $ (3,881) | $ (9,463) | $ 35,936 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Income Tax Liabilities and Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred Tax Liabilities: | |||
Lease Merchandise and Property, Plant and Equipment | $ 151,687 | $ 182,070 | |
Operating Lease Right-of-Use Assets | 116,372 | 114,868 | |
Prepaid Expenses | 4,578 | 5,412 | |
Other, Net | 5,476 | 5,697 | |
Total Deferred Tax Liabilities | 278,113 | 308,047 | |
Deferred Tax Assets: | |||
Goodwill and Other Intangibles | 49,104 | 55,733 | |
Accrued Liabilities | 16,893 | 16,614 | |
Advance Payments | 11,812 | 12,913 | |
Operating Lease Liabilities | 126,437 | 125,056 | |
Net Operating Loss | 8,207 | 15,436 | |
Stock-Based Compensation | 3,364 | 3,695 | |
263A Inventory Capitalization | 2,028 | 2,018 | |
Other Comprehensive Income | 449 | 0 | |
Other, Net | 1,151 | 5,851 | |
Total Deferred Tax Assets | 219,445 | 237,316 | |
Less Valuation Allowance | 412 | 0 | $ 0 |
Net Deferred Tax Liabilities | $ 59,080 | $ 70,731 |
Income Taxes - Valuation Allowa
Income Taxes - Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Allowance for Lease Merchandise Write offs: | ||
Beginning Balance | $ 0 | $ 0 |
State net operating loss carryforwards | 412 | 0 |
Ending Balance | $ 412 | $ 0 |
Income Taxes - Effective Tax Ra
Income Taxes - Effective Tax Rate Differs from Statutory United States Federal Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Statutory Rate | 21% | 21% | 21% |
Increases (Decreases) in United States Federal Taxes | |||
State Income Taxes, net of Federal Income Tax Benefit | (38.90%) | 1.50% | 3.70% |
Nondeductible Officers Compensation | (36.60%) | (9.10%) | 0.30% |
Permanent Differences | (60.60%) | (2.00%) | 0.40% |
Remeasurement of net Deferred Tax Liabilities | 504.60% | 34.10% | 0.20% |
Federal Tax Credits | 125.20% | 15.10% | (1.60%) |
Stock-Based Compensation - Tax Deficiency | (89.20%) | (1.60%) | 0.10% |
Valuation Allowance | (39.00%) | 0% | 0% |
Other, net | (19.70%) | 5.20% | 0.50% |
Effective Tax Rate | 366.80% | 64.20% | 24.60% |
Income Taxes - Summary of Activ
Income Taxes - Summary of Activity Related to Uncertain Tax Positions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Summary of activity related to uncertain tax positions: | |||
Beginning Balance | $ 439 | $ 470 | $ 683 |
Additions Based on Tax Positions Related to the Current Year | 0 | 0 | 0 |
Additions for Tax Positions of Prior Years | 281 | 109 | 0 |
Prior Year Reductions | 0 | 0 | (104) |
Statute Expirations | (154) | (140) | (109) |
Settlements | 0 | 0 | 0 |
Amounts Transferred to Former Parent | 0 | 0 | 0 |
Ending Balance | $ 566 | $ 439 | $ 470 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 | Apr. 01, 2022 |
Commitments And Contingencies Disclosure [Line Items] | |||
Portion that company might be obligated to repay in the event franchisees defaulted | $ 4,900,000 | ||
Fair value of franchise related borrowings | 1,000,000 | $ 1,300,000 | |
Loss contingency accrual | 700,000 | $ 2,700,000 | |
Revolving Facility | Franchise Loan Facility | Line of Credit | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Franchise loan facility | 10,000,000 | $ 12,500,000 | |
Marketing and Advertising Expense | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Non-cancelable commitments | 18,000,000 | ||
Non-cancelable commitments due in 2024 | 11,300,000 | ||
Non-cancelable commitments due in 2025 | 5,600,000 | ||
Non-cancelable commitments due in 2026 | $ 1,100,000 |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Jan. 31, 2024 USD ($) | Mar. 31, 2020 | Dec. 31, 2023 USD ($) store | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring expenses net | $ 15,597 | $ 32,717 | $ 9,218 | ||
Severance charges and professional advisory fees | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring expenses net | $ 1,720 | $ 4,881 | $ 0 | ||
Operational Efficiency and Optimization Restructuring Program | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Number of store closures, consolidations and relocations | store | 38 | ||||
Restructuring expenses net | $ 6,400 | ||||
Incurred charges | $ 18,000 | ||||
Operational Efficiency and Optimization Restructuring Program | Subsequent Event | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Severance charges | $ 2,100 | ||||
Real Estate Repositioning and Optimization Restructuring Program | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Number of store closures, consolidations and relocations | store | 250 | ||||
Restructuring expenses net | $ 9,200 | ||||
Incurred charges | $ 70,800 | ||||
Number of store closures | store | 1 | ||||
Restructuring and related cost, number of store closures expected over next six months | store | 12 | ||||
Real Estate Repositioning and Optimization Restructuring Program | Minimum | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Strategic plan, term | 2 years | ||||
Real Estate Repositioning and Optimization Restructuring Program | Maximum | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Strategic plan, term | 3 years |
Restructuring - Summary of Rest
Restructuring - Summary of Restructuring Charges by Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 15,597 | $ 32,717 | $ 9,218 |
Right-of-Use Asset Impairment | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 3,121 | 11,214 | 4,162 |
Operating Lease Charges | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 7,129 | 7,150 | 4,827 |
Fixed Asset Impairment | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 967 | 5,032 | 658 |
Severance | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 2,096 | 3,137 | 262 |
Professional Advisory Fees | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 1,720 | 4,881 | 0 |
Other Expenses | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 665 | 1,362 | 384 |
Gain on Sale of Store Properties | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ (101) | $ (59) | $ (1,075) |
Restructuring - Summary of Accr
Restructuring - Summary of Accruals of Restructuring Programs (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Severance | |
Restructuring Reserve [Roll Forward] | |
Balance beginning | $ 695 |
Restructuring Charges | 2,096 |
Payments | (2,620) |
Balance ending | 171 |
Operating Lease Charges | |
Restructuring Reserve [Roll Forward] | |
Balance beginning | 2,200 |
Restructuring Charges | 2,016 |
Payments | (3,367) |
Balance ending | 849 |
Professional Advisory Fees | |
Restructuring Reserve [Roll Forward] | |
Balance beginning | 1,032 |
Restructuring Charges | 1,720 |
Payments | (2,748) |
Balance ending | $ 4 |
Segments - Narrative (Details)
Segments - Narrative (Details) | 3 Months Ended | 21 Months Ended |
Mar. 31, 2022 segment | Dec. 31, 2023 store | |
Segment Reporting Information [Line Items] | ||
Number of operating segments | 1 | 2 |
Number of reportable segments | 1 | 2 |
BrandsMart | ||
Segment Reporting Information [Line Items] | ||
Number of retail stores | 11 |
Segments - Revenue by source an
Segments - Revenue by source and segment (Details) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2022 USD ($) store | Dec. 31, 2023 USD ($) store | Dec. 31, 2022 USD ($) store | Dec. 31, 2021 USD ($) | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 2,139,890 | $ 2,249,434 | $ 1,845,504 | |
Gross Profit | 1,119,319 | 1,161,773 | 1,159,489 | |
Earnings (Loss) Before Income Taxes | (1,058) | (14,743) | 145,870 | |
Depreciation and Amortization | 90,341 | 86,083 | 69,687 | |
Capital Expenditures | 94,415 | 107,980 | 92,704 | |
Non-cash inventory fair value adjustment | 82,477 | 96,009 | 67,148 | |
Restructuring charges | 15,597 | 32,717 | 9,218 | |
Acquisition-Related Costs | 3,638 | 14,616 | 0 | |
Impairment of Goodwill | 0 | 12,933 | 0 | |
Separation Costs | $ 201 | $ 1,204 | 6,732 | |
BrandsMart | ||||
Segment Reporting Information [Line Items] | ||||
Number of retail stores | store | 6 | |||
BrandsMart | Sale and leaseback transactions | ||||
Segment Reporting Information [Line Items] | ||||
Number of retail stores | store | 7 | 5 | 7 | |
Other operating expense | ||||
Segment Reporting Information [Line Items] | ||||
Gain related to the sale and leaseback transaction | $ 5,400 | $ 8,500 | ||
Unallocated Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Gross Profit | 0 | 0 | 0 | |
Earnings (Loss) Before Income Taxes | (94,416) | (125,021) | (77,578) | |
Depreciation and Amortization | 876 | 1,230 | 1,851 | |
Capital Expenditures | 5,723 | 6,176 | 7,651 | |
Restructuring charges | 9,200 | |||
Separation Costs | 6,700 | |||
Elimination | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | (10,996) | (6,534) | 0 | |
Gross Profit | (888) | (857) | 0 | |
Earnings (Loss) Before Income Taxes | (654) | (771) | 0 | |
Depreciation and Amortization | 0 | 0 | 0 | |
Capital Expenditures | 0 | 0 | 0 | |
Aaron's Business | ||||
Segment Reporting Information [Line Items] | ||||
Separation Costs | 200 | |||
Aaron's Business | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1,546,473 | 1,703,503 | 1,845,504 | |
Gross Profit | 976,547 | 1,061,266 | 1,159,489 | |
Earnings (Loss) Before Income Taxes | 99,041 | 122,220 | 223,448 | |
Depreciation and Amortization | 75,221 | 74,333 | 67,836 | |
Capital Expenditures | $ 75,497 | 98,305 | 85,053 | |
BrandsMart | ||||
Segment Reporting Information [Line Items] | ||||
Number of retail stores | store | 11 | |||
Impairment of Goodwill | 12,900 | |||
BrandsMart | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 604,413 | 552,465 | 0 | |
Gross Profit | 143,660 | 101,364 | 0 | |
Earnings (Loss) Before Income Taxes | (5,029) | (11,171) | 0 | |
Depreciation and Amortization | 14,244 | 10,520 | 0 | |
Capital Expenditures | 13,195 | 3,499 | 0 | |
Non-cash inventory fair value adjustment | $ 23,100 | |||
BrandsMart | ||||
Segment Reporting Information [Line Items] | ||||
Acquisition-Related Costs | 3,600 | 14,600 | ||
Lease Revenues and Fees | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1,399,514 | 1,529,125 | 1,633,489 | |
Lease Revenues and Fees | Elimination | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | |
Lease Revenues and Fees | Aaron's Business | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1,399,514 | 1,529,125 | 1,633,489 | |
Lease Revenues and Fees | BrandsMart | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | |
Retail | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 620,665 | 585,624 | 57,568 | |
Retail | Elimination | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | (10,996) | (6,534) | 0 | |
Retail | Aaron's Business | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 27,248 | 39,693 | 57,568 | |
Retail | BrandsMart | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 604,413 | 552,465 | 0 | |
Non-Retail | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 96,710 | 110,531 | 128,299 | |
Non-Retail | Elimination | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | |
Non-Retail | Aaron's Business | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 96,710 | 110,531 | 128,299 | |
Non-Retail | BrandsMart | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | |
Franchise Royalties and Fees | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 22,312 | 23,376 | 25,129 | |
Franchise Royalties and Fees | Elimination | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | |
Franchise Royalties and Fees | Aaron's Business | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 22,312 | 23,376 | 25,129 | |
Franchise Royalties and Fees | BrandsMart | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 689 | 778 | 1,019 | |
Other | Elimination | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | |
Other | Aaron's Business | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 689 | 778 | 1,019 | |
Other | BrandsMart | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 0 | $ 0 | $ 0 |
Stock Compensation - Narrative
Stock Compensation - Narrative (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2020 USD ($) | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Nov. 30, 2020 USD ($) shares | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Aggregate number of shares of common stock issued or transferred under the incentive stock awards plan (in shares) | shares | 1,301,147 | ||||
Common stock conversion ratio | 0.5 | ||||
Stock based compensation expense | $ 11.9 | $ 12.1 | $ 12.8 | ||
Tax benefit from exercise of stock options | 2.9 | 3.1 | 3.2 | ||
Excess tax benefit from share-based compensation, operating activities | (0.9) | 0.1 | 0.6 | ||
Aggregate Intrinsic value of options exercised | 0.1 | 1.8 | |||
Fair value of options vested | $ 1.4 | $ 1.2 | $ 0.9 | ||
Employee Stock | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Aggregate number of shares of common stock issued or transferred under the incentive stock awards plan (in shares) | shares | 836,435 | ||||
Unrecognized compensation expense related to non-vested award | $ 14.8 | ||||
Unrecognized compensation expense related to non-vested award, recognition period | 1 year 5 months 1 day | ||||
Granted (in dollars per share) | $ / shares | $ 9.25 | $ 11.21 | $ 18.28 | ||
Stock Options | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Stock options granted (in shares) | shares | 273,000 | 148,000 | 194,000 | ||
Restricted Stock | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Nonvested awards that contain voting rights (in shares) | shares | 882,000,000 | ||||
Granted (in Shares) | shares | 683,000 | 557,000 | 347,000 | ||
Granted (in dollars per share) | $ / shares | $ 11.99 | $ 21.38 | $ 22.89 | ||
Total fair value of shares vesting | $ 3.1 | $ 3.8 | $ 4.3 | ||
Performance Share Units | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Granted (in Shares) | shares | 398,000 | 355,000 | 136,000 | ||
Granted (in dollars per share) | $ / shares | $ 13.91 | $ 26.77 | $ 27.54 | ||
Total fair value of shares vesting | $ 2.3 | $ 4.6 | $ 3.9 | ||
Performance Share Units | One-year service period | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Vesting period | 1 year | ||||
Award vesting rights | 33.33% | ||||
Award requisite service period | 1 year | ||||
Performance Share Units | Two-year service period | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Award vesting rights | 33.33% | ||||
Award requisite service period | 2 years | ||||
Performance Share Units | Three-year service period | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Award vesting rights | 33.33% | ||||
Award requisite service period | 3 years | ||||
Performance Share Units | Minimum | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Performance percentage | 0% | ||||
Performance Share Units | Maximum | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Performance percentage | 200% | ||||
Employee Matters Agreement | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Shares converted and deemed issued (in shares) | shares | 2,900,000 | ||||
Converted awards, incremental cost | $ 5.5 | ||||
Converted awards, incremental cost recognized | $ 1.1 | ||||
Converted awards, incremental cost, expected cost remaining to be amortized and recognized | $ 0 | $ 0 | $ 2.7 | ||
2015 Incentive Award Plan | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Unexercised options lapse period | 10 years | ||||
2015 Incentive Award Plan | Employee Stock | Minimum | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Vesting period | 1 year | ||||
2015 Incentive Award Plan | Employee Stock | Maximum | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Vesting period | 3 years | ||||
2015 Incentive Award Plan | Restricted Stock | Minimum | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Vesting period | 1 year | ||||
2015 Incentive Award Plan | Restricted Stock | Maximum | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Vesting period | 3 years |
Stock Compensation - Weighted A
Stock Compensation - Weighted Average Valuation Assumptions (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend Yield | 4.17% | 2.10% | 1.84% |
Expected Volatility | 53.86% | 55.38% | 55.73% |
Risk-free Interest Rate | 4.17% | 1.90% | 0.87% |
Expected Term (in years) | 6 years | 6 years | 6 years |
Fair Value of Stock Options Granted (in dollars per share) | $ 4.58 | $ 9.45 | $ 9.56 |
Performance Share Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend Yield | 4.17% | 2.10% | |
Expected Volatility | 57.35% | 60.68% | |
Risk-free Interest Rate | 4.61% | 1.72% | |
Expected Term (in years) | 2 years 9 months 25 days | 2 years 10 months 6 days | |
Fair Value of Stock Options Granted (in dollars per share) | $ 15.81 | $ 32.09 |
Stock Compensation - Summary of
Stock Compensation - Summary of Stock Option Activity (Details) - Stock Options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Options | |||
Beginning balance (in Shares) | 879 | ||
Granted (in Shares) | 273 | 148 | 194 |
Exercised (in Shares) | (8) | ||
Forfeited/expired (in Shares) | (23) | ||
Ending balance (in Shares) | 1,121 | 879 | |
Expected to Vest (in Shares) | 400 | ||
Exercisable (in Shares) | 708 | ||
Weighted Average Exercise Price | |||
Beginning balance (in dollars per share) | $ 15.45 | ||
Granted (in dollars per share) | 12 | ||
Exercised (in dollars per share) | 10.78 | ||
Forfeited/expired (in dollars per share) | 14.80 | ||
Ending balance (in dollars per share) | 14.66 | $ 15.45 | |
Expected to Vest (in dollars per share) | 15.61 | ||
Exercisable (in dollars per share) | $ 14.16 | ||
Share Based Compensation Arrangement By Share Based Payment Award Options Weighted Average Remaining Contractual Term [Abstract] | |||
Outstanding | 6 years 7 months 9 days | ||
Expected to Vest | 8 years 2 months 1 day | ||
Exercisable | 5 years 5 months 1 day | ||
Aggregate Intrinsic Value | |||
Outstanding | $ 527 | ||
Expected to Vest | 0 | ||
Exercisable | $ 527 | ||
Weighted Average Fair Value | |||
Outstanding (in dollars per share) | $ 5.77 | ||
Expected to Vest (in dollars per share) | 6.44 | ||
Exercisable (in dollars per share) | $ 5.40 |
Stock Compensation - Summary In
Stock Compensation - Summary Information about Stock Options Outstanding (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
$0.00-$10.00 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price, lower range limit (in dollars per share) | $ 0 |
Exercise price, upper range limit (in dollars per share) | $ 10 |
Options outstanding, number outstanding (in shares) | shares | 124 |
Options outstanding, weighted average remaining contractual life (in years) | 2 years 7 months 9 days |
Options outstanding, weighted average exercise price (in dollars per share) | $ 7.19 |
Options exercisable outstanding, number outstanding (in shares) | shares | 124 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 7.19 |
$10.01-$20.00 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price, lower range limit (in dollars per share) | 10.01 |
Exercise price, upper range limit (in dollars per share) | $ 20 |
Options outstanding, number outstanding (in shares) | shares | 672 |
Options outstanding, weighted average remaining contractual life (in years) | 6 years 10 months 17 days |
Options outstanding, weighted average exercise price (in dollars per share) | $ 12.67 |
Options exercisable outstanding, number outstanding (in shares) | shares | 411 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 13.09 |
$20.01-$30.00 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price, lower range limit (in dollars per share) | 20.01 |
Exercise price, upper range limit (in dollars per share) | $ 30 |
Options outstanding, number outstanding (in shares) | shares | 325 |
Options outstanding, weighted average remaining contractual life (in years) | 7 years 7 months 6 days |
Options outstanding, weighted average exercise price (in dollars per share) | $ 21.63 |
Options exercisable outstanding, number outstanding (in shares) | shares | 173 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 21.67 |
$0.00-$30.00 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price, lower range limit (in dollars per share) | 0 |
Exercise price, upper range limit (in dollars per share) | $ 30 |
Options outstanding, number outstanding (in shares) | shares | 1,121 |
Options outstanding, weighted average remaining contractual life (in years) | 6 years 7 months 9 days |
Options outstanding, weighted average exercise price (in dollars per share) | $ 14.66 |
Options exercisable outstanding, number outstanding (in shares) | shares | 708 |
Options exercisable, weighted average exercise price (in dollars per share) | $ 14.16 |
Stock Compensation - Summary _2
Stock Compensation - Summary of Restricted Stock and Performance Share Units Activity (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Beginning Balance (in Shares) | 857 | ||
Granted (in Shares) | 683 | 557 | 347 |
Vested (in Shares) | (326) | ||
Forfeited (in Shares) | (110) | ||
Ending Balance (in Shares) | 1,104 | 857 | |
Weighted Average Fair Value | |||
Beginning Balance (in dollars per share) | $ 21.16 | ||
Granted (in dollars per share) | 11.99 | $ 21.38 | $ 22.89 |
Vested (in dollars per share) | 19.30 | ||
Forfeited (in dollars per share) | 17.04 | ||
Ending Balance (in dollars per share) | $ 16.44 | $ 21.16 | |
Performance Share Units | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Beginning Balance (in Shares) | 485 | ||
Granted (in Shares) | 398 | 355 | 136 |
Vested (in Shares) | (189) | ||
Forfeited (in Shares) | (46) | ||
Ending Balance (in Shares) | 648 | 485 | |
Weighted Average Fair Value | |||
Beginning Balance (in dollars per share) | $ 23.17 | ||
Granted (in dollars per share) | 13.91 | $ 26.77 | $ 27.54 |
Vested (in dollars per share) | 18.42 | ||
Forfeited (in dollars per share) | 19.82 | ||
Ending Balance (in dollars per share) | $ 16.18 | $ 23.17 |
Stock Compensation - Employee S
Stock Compensation - Employee Stock Purchase Plan Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 20, 2023 | Mar. 19, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Aggregate number of shares of common stock issued or transferred under the incentive stock awards plan (in shares) | 1,301,147 | ||||
Employee Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share reserve | 1,050,000 | 200,000 | |||
Offering period | 6 months | ||||
ESPP purchase price of common stock, percent of market price, on first and last day of trading date | 85% | ||||
Fixed contribution rate | 10% | ||||
Maximum contribution amount | $ 25 | ||||
Aggregate number of shares of common stock issued or transferred under the incentive stock awards plan (in shares) | 836,435 | ||||
Number of shares issued under the ESPP (in shares) | 34,092 | 110,911 | 68,562 | ||
Weighted average grant date fair value (in dollars per share) | $ 9.25 | $ 11.21 | $ 18.28 | ||
Compensation cost for ESPP | $ 100 | $ 300 | $ 300 |
Compensation Arrangements - Def
Compensation Arrangements - Deferred Compensation (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Deferred compensation plan liability | $ 10,600,000 | $ 8,600,000 | |
Cash surrender value of the policies | 15,200,000 | 13,400,000 | |
Gain (loss) on cash surrender value of life insurance | 1,900,000 | (2,300,000) | $ 1,600,000 |
Benefits paid | $ 700,000 | 1,300,000 | 2,300,000 |
Employer matching contribution, maximum percentage | 100% | ||
Defined Contribution Plan, Tax Status [Extensible Enumeration] | Nonqualified Plan [Member] | ||
Employee | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Percentage of receipt of base compensation (up to) | 75% | ||
Maximum contribution per employee, percentage | 4% | ||
Maximum annual contributions per employee | $ 13,200 | $ 12,200 | $ 11,600 |
Vesting period | 3 years | ||
Employee | First contribution | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Employer matching contribution, maximum percentage | 100% | ||
Maximum contribution per employee, percentage | 3% | ||
Employee | Second contribution | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Employer matching contribution, maximum percentage | 50% | ||
Maximum contribution per employee, percentage | 2% | ||
Non Employee Director | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Percentage of receipt of base compensation (up to) | 100% |
Compensation Arrangements - 401
Compensation Arrangements - 401(k) Defined Contribution Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Maximum 401 (k) plan contribution rates as percentage of employees earnings | 75% | ||
Employer matching contribution, maximum percentage | 100% | ||
Initial employer 401(k) matching contribution to employee percentage | 4% | ||
Employer 401 (k) matching contribution to employee, 50% Maximum | 50% | ||
Compensation expense related to 401(k) savings plan | $ 6.3 | $ 6.3 | $ 5.6 |
Maximum | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Initial employer 401(k) matching contribution to employee percentage | 3% | ||
Minimum | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Initial employer 401(k) matching contribution to employee percentage | 2% |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - BrandsMart $ in Millions | 12 Months Ended | |
Dec. 31, 2023 USD ($) store | Dec. 31, 2022 USD ($) | |
Related Party Transaction [Line Items] | ||
Number of retail stores | 6 | |
Initial operating lease term | 10 years | |
Renewal term | 20 years | |
Number of operating leases | 6 | |
Real estate expenses | Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Expenses incurred with related parties | $ | $ 12.9 | $ 9.9 |