PROG (PRG) 25 Oct 182018 Q3 Earnings call transcript

Company Profile

Participants

Michael P. Dickerson	Aaron's, Inc.
John W. Robinson, III	Aaron's, Inc.
Ryan K. Woodley	Aaron's, Inc.
Douglas A. Lindsay	Aaron's, Inc.
Steven A. Michaels	Aaron's, Inc.
William B. Chappell	SunTrust Robinson Humphrey, Inc.
John Allen Baugh	Stifel, Nicolaus & Co., Inc.
Bradley B. Thomas	KeyBanc Capital Markets, Inc.
Beryl Bugatch	Raymond James & Associates, Inc.
Kyle Joseph	Jefferies LLC
Anthony Chukumba	Loop Capital Markets LLC

Call transcript

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Operator

Good morning. My name is Andrea, and I will be your conference coordinator. At this time, I would like to welcome everyone to Aaron's, Inc.

Third Quarter 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. there a remarks session. speaker's the will question-and-answer be After call to Mr. I like the over would now turn to Michael Dickerson.

You may begin your conference.

Michael P. Dickerson

Thank earnings Mike everyone. third Investor you, Welcome to the morning, and Aaron's, Relations. quarter conference Vice Dickerson, XXXX I'm call. President of good Inc.

this Lindsay, Aaron's, President of Joining Michaels, Aaron's and President Executive of morning Release and of Officer Aaron's, John of Chief you a seen issued our Many Financial Operations. Steve President Woodley, this the Strategic Ryan Executive are Officer Inc. Progressive Chief morning. Robinson, me already Inc. Officer; Leasing; and of Chief Douglas Business; have copy Earnings

For of those available section our is website it at who of have Aarons.com. not, Relations on the Investor you

and I provision any for call cause year differ from see Safe our Harbor that risks the and The During Also, actual earnings, with XX-K performance Company's non-GAAP With with not periods, adjusted to understanding our provision financial forward-looking measure These provides would included measures meaningful non-GAAP like cautioned attention description for end be prior Earnings will of EBITDA, want EPS, we Release. emphasis our I measures forward-looking John to which The risks undertake companies. statements. facilitate statements. undue the to on detailed from call the turn items and be the cash this statements that to to of SEC, be for call, the insight with our are statements other to including non-GAAP and we to may our these for into certain Form ended the with call, found a the of help which XXXX Harbor December your them certain obligation non-GAAP in related business Safe please adjusted been content identifies Listeners today's that are performance. forward-looking affect comparability performance over investors our results subsequent actual our update that certain results we On statements. measures operational such filings believes tables have results EBITDA reconciliation provide and may assist XX, and of Release. the these materially statements net non-GAAP operating financial can make, operational to that, in forward-looking flows Earnings to ongoing materially to to at Company Robinson. to place the and of to no differ Company's cause our forward-looking. may the will comparisons referring

John W. Robinson, III

XXXX thank quarterly strategic our the third on XXXX. and quarter with I'm and and of believe, for XX% continued we're EBITDA aftermath. continues progress partners, minimal of storm track the Mike, assist beyond. in platform you those retail heartfelt targets we're and adjusted EBITDA benefited and making address our Florence to involved throughout the turn and Progressive quarter. the to $X.XX, to quarter pipeline optimizing that gain to performance going and The by Progressive achieve to affected record we're e-commerce are the increased planning financial XX% as exceeding for to third potential in we increased to the And improve revenues strong initiatives assets our execution Business XXXX above execute very improve associates Aaron's today. Business want achieved late event on There Aaron's Hurricane compared the to $XXX third has is positive our joining quarter and innovate and with for the quarter omnichannel omnichannel initiatives. offering. thank revenues large level. revenues growth We in Thanks, we many and everyone million pleased driving our our platforms. same-store We outlined for the Non-GAAP over investments about XX% extend damage us a momentum in on time results despite outreach. opportunity third an as excited was Adjusted team's at of first stores products previously across examples results. all the significant its revenues, lease you makes of believe I serve continue opportunities market from team additional working proud I'm Business are Progressive for of partners, customers EPS both we its and more was you. third to the EBITDA these to investments continued of increase a to The Progressive quarter. on we will our that to growth to stronger and and fourth are high its beyond expect transformation own. performance a to The and Aaron's

ended investing resources shares paid the including the will X are these debt stronger and million seeing traction. are shares dividend. customer and the We for third drive XXXX, and improve million have existing quarterly success in regular X.X capital Throughout serve. in XXX,XXX our lower bought to we to the third experience millennials, cost in including quarter and quarter to than believe EBITDA cash our times. adjusted and of back $XX engagement with customer areas net we where We We shoppers new less

consecutive paid of nine first a total dividends, for For XXXX, of and $XXX a combination to of we million XX we share repurchases through shareholders returned years. months the which have

our always to capital in high helps continue flexible and look We to of adjacent return platforms, in analytics that over and decisioning, while relationships, of capabilities any products furniture as discuss to and servicing innovate absence markets, to conservative and affordable ongoing way. gain our set returning significant acquisitions, range and in outcome drive to businesses a is opportunities plan customer quality will maintain wide model existing the shareholders. our retailer a a manufacturing. customer for In and of turn and Progressive. that competencies. I and access to a it to existing now partner transparent, and goal to we capital investing using Ryan, to customers expect to assets additional Our operate delivery unique mile These include structure last

Ryan K. Woodley

Thanks, third John. EBITDA Progressive to profitable and to on quarter large driven by volume from again, to strategy a XX% rose quarter XX% door active a of Total number invoice the expense performance revenues primarily resulting invoice increase doors. XX% in the in our increase drive and revenue record robust in of and leverage. strong in a This by operating growth, continues was $XXX growth to we compared XXXX stronger of Invoice increased increase execute by a the quarter driven per led as to was XX%, pursue million. the under-served as number a transactions door. market. active volume the in per X%

cycling increasing strong are across We Gross we year existing productivity new new and to revenue door in lower doors. progress a We year EBITDA from planned in X.X% ahead ago, period. making activity. in was the margin ago and continue buyout XX-day of expected make driven revenues expenses investments growth. SG&A year-over-year, modestly despite future additions leverage of XX.X% generated versus by was

potential quarter, that growth rate shown pipeline bad and Write-offs XX.X%. evidence retail was new I of mentioned X.X% ago sustained debt and revenues well-positioned and to in of at of last As quarter. partners, the with we're convert strong a believe year we have a were of expense the large flat period

to of well to metrics our remain these the X% for respectively XX%, ranges within expect X% year. annual XX% to We and full

Aaron's of XXXX, best partners. balance and serve continue product momentum growth comments encouraged look our in and As about Business. we're on now the we strong innovate as sustained ability to customers the to we we're invoice for Douglas excited to over turn volume to our it retail I'll by our driving the

Douglas A. Lindsay

the despite margin. in to compared quarterly make the Ryan. teams quarter. consecutive franchise customer and we're same these solid recurring with operating The continued slower to into acquired with encouraged stores through achieved quarter we in continuing of as results and the write-offs improvement third XX the the in the higher experienced consecutive and Hurricane business. while by third onboarding in and In the we've time, Aaron's the of throughout Thanks, proud I'm were for the flat, written seventh XXXX and X.X% QX, our increase lease preparing at seeing somewhat progress X.X% improving revenues traffic, increased We XXXX. trend, up Florence. quarter momentum, Same-store portfolio revenue achieved revenues the revenues in Total Business quarter. lease

the including initiatives, in which number platform, benefited almost the franchise stores by this third quarter. re-launched driven conversion mentioned written traffic, of of year. the part revenues portfolio earlier increases addition up revenues in and recurring were primarily online quarter lease the aarons.com earlier a driven from in third business acquired our by XX%, transformation to revenue Same-store release, As compared press ticket. the new was in of E-commerce was XXXX, into our

can of as and that as believe in revenues to delivery our existing infrastructure we are we We scale versus initiatives. we reduce type for Write-offs expect increase will increased in partially X.X% Adjusted to EBITDA advantage revenue, responsible centers, believe higher in business grow we leverage promotional a which last-mile and quarter. our the ticket logistics, last fulfilment a our to write-offs impacted e-commerce Planned same reverse enable offerings stores X.X% that write-offs elevated of our we and related is year-ago made in were hours in offset our continue was of benefited year. X.X% increase margin, the from the by X.X% X.X% business lease collections increases were profitably. EBITDA changes of Adjusted an e-commerce overall versus performance and of to which period growth labor transformation number and the revenues in us quarter. negatively and the portion investments competitive

the forward, in our we're look we As business. encouraged underlying by trends

it initiatives for sequential we the expect leading performance. business financials. and an Steve for quarter indicators transformation update remain to on third the will turn I'll Our positive to continue now drive improving over our

Steven A. Michaels

on to quarter. million I'll an XX.X%. quarter non-GAAP quarter the for highlights compared the year a million EPS was $X.XX ago. increase of increase third in a $XXX.X year increased XXXX in XX.X% of million for Thanks, basis year, EBITDA Douglas, $XX.X $XX.X for the an was of $X.XX or XX% Diluted million, of for period Now, same quarter $XX.X turn some period third for financial the last versus over this the to for to XXXX the the Revenue Company XXXX. same Adjusted

will have $XX million costs we versus bad in well have previously-disclosed from to operating driven from at is XX, the XXX our CIDs. bit than investments expense expenses million year-ago by increase $XX earnings months, increase the fees, dollar year-over-year half our and selling at of scheduled months million write-offs was for of release, balance added from the FTC on scheduled seen and Through businesses, by Business. September between nine further acquired has our cash The the quarter. of The million payments, to Approximately first company amortization amortization intangible increase increase XXXX the its two-thirds Aaron's for by compared change the million more with we balance for loan the million the by was stores acquisitions. franchise through XXXX, since and the from the revolving corporate agreement and you $XXX $XX in the The credit $XXX A of to million addition $XXX.X of the debt from last company expected franchise in increased same company driven hand operating franchise $XX primarily XXXX. reduce term XX debt with company of generated stores As term capital amount On improvement periods. a loan, XXXX. end to reduced working the general, October The XXXX. facility use the period a paid taxes total $XX million two to response a from resulting expense end the of legal also October the $XXX the repayments XX, the driven through was the debt no as of total and In spread normally Progressive. $XXX amended cash to XXXX. and in intends occupancy, personnel, million by XX, of both million compared company was increase extend facility the remaining provide of the cash delivery the net At amended activities across of borrowing $XX XXXX, maturity Cash its purposes. had loan XXXX. commitment which million, as

XX franchise our used the quarter acquired availability the and $XXX of under hand conservatively and EBITDA capitalized less revolver to discussed, in following $XXX As on of fund than Douglas debt one-time. remain net to million stores approximately We July liquidity both with the ended million. John acquisitions. third we We and acquisitions XXXX available adjusted for cash and

for During of the common company approximately stock the at share. approximately $XX.XX $XX.X quarter, per price third million shares of an purchased average XXX,XXX

its As of company the the under third million authorization. remaining share of the end has quarter, $XXX repurchase

are in annual for release, noted we tightening the earnings our As XXXX. outlook

note You expected we the of range maintained revenue Progressive. that for revenue the will guided Aaron's the for Business upper range the have the to half midpoint and of

fourth the in Aaron's revenues For continue to we quarter. the expect Business, positive same-store

XXXX. to does the EPS I'll over non-GAAP assume We This expect share of John remarks. closing back during of $X.XX. turn for now the repurchases update any to not balance range additional consolidated some call in the $X.XX

John W. Robinson, III

Steve. you, Thank

We are in our quarter about are third results our momentum seeing with and excited pleased business. we the

is of are all success of the experience our result direct much franchisees for a for very efforts. day. partners, tireless efforts best to your every committed retail the and providing Our Thank you our associates, customers who

is opportunity. to believe on are there large market we capitalize well-positioned we discussed, un-served a have As this we and

great move made the over progress past years, to the continues few we've While market fast.

we're I better to With to will continuing than our ever that, business serve innovate Q&A. over the customers. So, to for it more operator turn focused our on

Operator

Thank you.

ahead. question-and-answer now comes our Chappell will question Please SunTrust. of from first We Bill the begin And session. go

William B. Chappell

Thanks. Good morning.

John W. Robinson, III

Good morning, Bill.

Ryan K. Woodley

morning. Good

William B. Chappell

on of may that's kind surprise onboarding profit I a be standpoint, bit that the any of it that we mean, And as to it, customers? being guess, Why in? at on certainly of hit especially then little on I just, standpoint, fourth that guess, looking street I of Just to in the the previous couldn't going you profit, it trying into (XX:XX) just Can new me understand just kind missed other understand where clear to quarterly understand a high-end? where wasn't Progressive Is Is trying EBITDA the reined the investments? is just planned you're understand just you also how because the came help why and below? trying or quarter? these on

Ryan K. Woodley

with we've now. quarters Progressive, on last quarter. pleased strong the growth Bill. strong, in The growth here. the the Yeah, year, I'm happy Ryan are EBITDA revenue The that obviously and with seen obviously very several consistent

kind on and we're there just I maybe think of a where as bad midpoint of the to line P&L. to there about it up. good write-offs, then, in with expected of pretty as story end what off maybe growth. XX-day expected flow we than Gross the far rate expect and margin we're feel we we operating be strong relates pretty because buyout continued that debt because not to And range than the going the of year, them through much leverage the of the a little SG&A the narrowed had you of leverage, activity. outlook bit is little bit tighter more and

John W. Robinson, III

John. this understand And mean, I appreciate question. and Bill, the is Yeah.

think, here preparing was work press acquisitions. if big lot I too, the bit We for a around on – moving were We in own XX Business I that Florence mean, here – we were look got onboarding franchise traffic hurricane, was and on write-offs had higher you specifically. had its Aaron's of a a which going had had boarded and storm soft, it Hurricane the in that lot parts that right. was of Business the I on Aaron's the think a of quarter. the we we stores at quite

pulling that. goes along we've it's in our we've coupled we running lot a business the annual you of look feel of have know the provided just at kind all the that year, And as we like and levers be pot day-to-day guidance, resulted really year, said which got that, kind momentum that, think provide Having a businesses. you that mentioned to good the outlook solid been with all for just we in Ryan about the – going if into the so, of I that just that things with

We have just we're work if front be. opportunity market a we're the continue And really both of businesses, to us. big look at you about XXXX optimistic in in overall and doing

William B. Chappell

No, I it. hurricane the appreciate Got color.

that guess, amount confirm there following just you Ryan, about guess, But leader or helpful? tests it of the guidance? any to thing be any the I that new past that at we been or should of as up, of be the change Just, has a commentary I of margin lower or slower of anything also that are are the nationwide. looking if customers, fair part change going or the online does will growth different our these part coming any Does metrics want

Ryan K. Woodley

much Obviously, partners in a onboard Yeah. was quarter. that that the QX, fact on with XX,XXX case at this that such we're by grow in that. QX that the as the a a doors the large couple I'll a We're pretty onboarding and new tends adding to every add scale saw, basis. things new that active well, in even doors, you which to launching the as of able base fact of on is know pipeline just you those did pleased we be and case new tends at quarter, to partners evidenced

very of You today for excited always for it pretty would relationship we're out growth. press particular, bullish about, release saw We're pipeline it about investing the ahead we're which like growth. do went and we're what that that about one excited about what future looks

build will functional every from we area case, vertical, the continue scale it that generating to as a has and in the pleased maintain infrastructure onboard But forward. of but comes in is very across essentially that case of where new do SG&A an up. we're of And profitability QX. been spite to year threshold volume, going we're channel, invoice that by by shaping that we we're to irrespective and leverage to in effort required the almost and systems the So, effectively partner, people and attempting how with be adding

William B. Chappell

Thanks it. Got so much.

Ryan K. Woodley

Thanks, Bill.

Operator

comes next ahead. Stifel. John from go Baugh Our of Please question

John Allen Baugh

Good each ask the question guess, side a of morning. you. on I Thank business. I'll

next don't in year. think core we the how to still you've nicely want just year margin year may business the I'm next sort but investments comps this are imply and as of over I'm trend to that go the tickets potential to up color time? of some to And get down, year that how would up about margin if been better, of up if business or flatten the negative, flat grow traffic's right, the guidance, and if the store, On I the any the The tickets is there curious making out over the is profits XXXX business. about structure investments

Douglas A. Lindsay

Thanks the higher indicators this I carry in comments, Douglas. the leading as business comes a consecutive so is Yeah, portfolios. of the as I question. portfolio leading quarters positive forward we you're John, revenue quarter, the some out my and the we're mentioned Yeah. of exactly had will is to written that this of which also are churn portfolio. for right the indicators really on three churn important mean about

expansion time XXXX. will cost and that some controls Fortunately, us for we've will we seen continue carry good the that business. ticket in the In this into and year, expect margin

at business validating. on work and the which to of investments our further planning and to we and of year, portfolio we we be which go we'll testing in transformation want those want for as assessing terms those towards However, looking into accelerate deeper our of next

radar of So, quarter. of investment kind determined some will next with here on while the that happy over our we're be and is fundamentals, underlying the

John Allen Baugh

on any there? you've Okay what work and just a Have bit mentioned own think, this Douglas, as mentioned you if types I what didn't you just of has and of some little elevated staying it your caused or already some is something you curious, color this that planned and I'm on, guess, write-offs and any I or and tried landscape competitive – promotions not. altered

Douglas A. Lindsay

I mentioned Yeah. prior would the it this Sure. promotional good right is Most mentioned in reasons. self-inflicted of is our quarters. self-inflicted. before say of part We We it activity. for

an our higher terms in So as periods we're charge-offs through lift a we're of it's like deliver at we bit than we portfolio more book write-offs. in sooner value dollar non-promotional periods. promotions, low the doing revenue, higher incurring promotion the more of see And of overall that acceleration driving although a net these little because

mentioned employing, also two trade-up those – has is a ticket ROI, is positive in we'll We think and us been trade-off a when write-offs. the is I going as increases terms a we strategy, And have where continue reason. an the been merchandising you to The that driving increasing ticket higher between naturally, thing last for and of we've strategy make forward. cost trade-off labor really

quarter, our business. those tweaking job model. overcorrected in the we're That's and those staffing where may little too constantly up in we collecting our been see benefit some labor still but constantly labor, of itself quarter. correcting we But are get done we've deep in that assessing We've some enjoyed the in believe should the corrected markets, and for and fourth we've savings. something we tighter of We and of I the labor a how labor we in cut optimize be

our we're So, control and self-inflicted. that's within totally somewhat something that's

John Allen Baugh

Okay. side or discernible either there your impact from that – the I in what's Progressive at Thanks Ryan, firm for prospectively? then that on on is am say, color. any going year-to-date And results

Ryan K. Woodley

close with not a relationships the been there but well specific decent out press to for those had time. known business. our team Thanks a is on comment a you pretty coverage quite tend They're on for great partner some question. realize relationship the We know, and there's and we have I longstanding as there accounts, of very and

think, business. partnership that's we on execute provided combined material to revised both don't effort to we have closures teams a the outlook store continue announced think, attributable been that part incorporated The we that. in expect and do I today, the of large to a impact in they job program see that in of the the the growth I were great it'll had while

are we're their being to a So, future growth. they great big and partner looking forward very part of

John Allen Baugh

and not Okay. doors, specific invoice on doors I amount get metrics, potentially all things, but meaningful these all wanting volume. of that will specific I appreciate accounts and few believe And finally to add you a into and brought then but very these overstock,

brought next You of on with don't I look very some fully share I'm out. ramping? think how quarters, count need invoice that us, Signet, rolled year added is short might get term with couple how to sense you those the things a and metrics Conn's but of trying guess, what and necessarily what know volume to all Thank on ago you how door are based I you.

Ryan K. Woodley

very We're very question. Yeah. accounts mentioned well-run that we've all those you well on our that year; with last the program. that businesses they're on-boarded Appreciate the in executing obviously are very, happy

that level over productivity sustained door in the actually saw active of we in You had decade. out doors highest seen period, our a rate of the pretty a we've invoice high it's per existing of

to the spite holiday a expect flat rate just holiday smaller and and being Second even a in coming season slightly of pretty ticket. year, that's which season, it year-over-year you'd approval obviously, last

platform, they remains of I of excited to obviously but pretty time. contribute. they of partners in So, on-boarded what It's we're ability that the what continue drive out. of to on we're only done productivity those seeing by strong shown doors. the see new pleased our be that's been a I and lot this happy relationships we're playing it revenue our doors can mean, obviously they've that, we're that level of team growth. over but seen an future mix of what expect well, doors periods mix produce will about but work that's what rate of to performed That's how do obviously hard managing productivity, productivity to nice and level to increase have with is not a out

John Allen Baugh

is a the was comment, I will of something that and the XX-day be of that that something or the the business accounts. given to permanent is kind just mix change, because that the sense or is of retail continue? expected lastly, surprised do And to with you of types no mix, it

Ryan K. Woodley

it's offer, the XX-day beginning. been feature, the the know since you As around

XX-day wider take of lot a So in it. influence that and variations we've variables rate seen are there just

customer reflected What elevated seasonality and because tend we're – to in the results mentioned, had outlook put sit quarter-to-quarter. you But that's drivers, obviously that seeing today. what is I today, now that provided to than a the we place so know are – many as They we of in there's planned. bit around revised expect slightly we you this movement to deliver don't and number. pricing, there here behavior vary significant in mix. As kind there previously. is And taxes And that see guided invoice that I from we they to

John Allen Baugh

Thank luck. Great. you good and

Ryan K. Woodley

Thanks, John.

Douglas A. Lindsay

Thanks, John.

Operator

Our next KeyBanc question comes ahead. from Brad Thomas of Capital Markets. go Please

Bradley B. Thomas

want on... to I ask Good morning. first Thanks.

Ryan K. Woodley

morning. Good

Bradley B. Thomas

just talk been into of you And I we've it's you about know the same-store the a mean, congratulations – at on Aaron's... know more five the since I on territory side drivers comp think little positive growth of bit here, the business, – Aaron's moving sales. a years seen ...the on

Ryan K. Woodley

Thanks.

Bradley B. Thomas

...business.

encouraging. very certainly So

Douglas A. Lindsay

Thank you.

Bradley B. Thomas

Douglas, I question. on wanted forward look John's up you as guess follow I to But

if give us the customers guess, of out this get you try that you're you sustainability longer? it going merchandise, context seeing? customers' about the getting you I down, know, job put customer You the going could agreements know, more. ticket done you've the accounts more – – of that or can a growth How just improving to to you great you can keep and know much raise spend how further

Douglas A. Lindsay

Sure.

and lot ticket mean, really growth patterns XXXX. of two some negative believe traffic I there's we terms that is overcoming think things. into So, a enjoyed I has that carry-offs comps of One, in these of ticket, We that continued. growth more

are I investments, can't we you to we're mentioned to happen refer ticket forever investments. that I in really business. have the where those And our other things a when mean, However, there's as making and raise

appealing case need to competitive how transformation, started that we as pricing out just to see rent-to-own. assortment, got product the to things broader retail tiers think we customer that do you relative the and to in about we experience, are product is the we're customer serve about experience And players we in we're market same know, lowering set time competitive retail? be more is that You relevant what we serve. do it's to customer appealing in also cost improve to that's market do not like sure the how We lowering we our the customer hear enhancing with and our make at being business How we've cost feel And merchandising. doing. our get on. a generally all and working When we with the

think assortment, So product were we rebuilding we groupings out of and modernizing tested a e-commerce seeing store operation, and going more considerable relevant. of these hours longer we're store of to test-and-learn concepts, platform optimizing processes, this some concepts it in that we – lot those further expanding kind makes in We've tests new them our lift environments we're our and them. centralizing and Aaron's term of small rolling and validate between have

turn the the decreases carry that you've so hoping while last customer traffic for to seeing to the make so ticket's these and on we're the we And of tides will year. some been that business us going XXXX, begin customer in over in investments account

Bradley B. Thomas

you, Douglas. Thank I on helpful. very That's the... if can you Ryan, And ask

Ryan K. Woodley

Yeah.

Bradley B. Thomas

annual side, like tracking... ...aggressive on year-over-year not well, an year-over-year this quarter but looks the up it – debts bad basis, it's up are

Ryan K. Woodley

Yeah.

Bradley B. Thomas

the you success tracking way line you last guess, like better had with the we back, the you're in now underwriting I with just it few years or with feels in target the business. had more guys if year-over-year step ... range. line your

maybe does move? ahead track you sales in in maybe debt think that margin you with may any guess, that to more expansion great? that potential XXXX? year, the some dots to mean the debts better just think we next here, would really bad connect what starts direction give line and be line if bad expense of me some I And for help you As do

Ryan K. Woodley

mix QX but of XX' you we it's all those increases, I heard appreciate healthy, since commentary. the we've quarter is, really before shift of shared we've on driving of kind expected, that guidance what's message then. Brad. say those you about and expected which reiterated was the kind Thanks since know, it every provided me that I that's the same know things

today. year pretty kind have narrowed to our story remainder outlook which share is in were, look as reflected we is and the much you we for write-offs. provided So with but spot XXXX, playing what we that very through the is Obviously on the the on out and of expected anything expectations of line with don't bad XXXX, in the debt both what again same

Bradley B. Thomas

much. Great. all Thank you so

Operator

Raymond James. next from Budd Our go ahead. of question Please Bugatch comes

Beryl Bugatch

Good morning, my you questions. taking thank and for

John W. Robinson, III

Good morning, Budd.

Beryl Bugatch

I'd guess, like changed. – like little to what's I'd think about seasonality a for bit step to John. I second hi, back and a talk and just

talk it pretty didn't least just we guidance? you Maybe do about at mentioned, high a should level can seasonality get much right. of you Bill all think annual provide I we or think at the only seasonality how since

John W. Robinson, III

just there. in, quarter add I – Yeah, from had. I driven but – perspective others mean, Budd maybe tax the impact, because last of a because business perspective, we quarter demand know, is certainly mean know from from unusual an the is is going that unique a unique this fourth is to perspective, year is This hurricane if compare can any in the this first factors But and continue of we you just be year tried unpredictable. quarters, don't on don't of we But a seasonality and we quarter because and a seasonal I John, season and what seems not other weather we more good there's is to us of the we're third year track giving factor like that's to for picture for terms other to I in the we're pretty to that. still guidance on that you of look like the think any than going know, think feel give we

Beryl Bugatch

Got you.

a pools, little about or as there, about turns, Okay. surprises bit the economy and on some in there's a talk pools, concern taken quality you notable? either that the to of be can anything more there performance of been performance is might pools the some Ryan, a you the recent recent credit has

Ryan K. Woodley

reiterate with expected. what for just are but would in redundancy the said what performing line I I apologies before, we they

an thing on seven life of leased out we're pools, to the term and months. average, performance about know, the about call talking pools contractual those are like term so You really quickly months, that is XX the we lease of

have those to continue we the in good visibility performance pools. of So

line I think, and metrics expectations, life debt our we're to the with write-offs lease, is be of the in in we the much driving And on be. what and identify what ultimately to analytics line which in expected bad always on investing in are earlier will ultimate performance its year. those with indicators pretty

seeing. we call. year with of provided pleased the that, And we're out in kind outlook XXXX on we is when this line the laid what of provide I'm view we again that QX, that the with So, initially

Beryl Bugatch

in factor sequentially ahead or And we're been have planned the at? investments revenue, we not to that quarter talk into of next come you more looking so anything to might able about what

Ryan K. Woodley

to just be seem – and functional voracious really. talent to story them. we find in every That Not generally. area can always a have onboard continues just to appetite trying the We we for good people

quarter faster XX%. consecutive sixth our it's of So growing than

So we we that investing people fields systems and on can as support to quickly are always, in as growth.

John W. Robinson, III

get in fact are think have this as well that about managing as fast, they the goes super fact they and predict I'll to that in the to Budd, that question these well the moving Aaron's impressive. spoiled in super by a lot add the But guys get Bill's have as back to year and thing me to to these deliver. of the guys business are is as growing that One which expenses of Progressive business Yeah. John. beginning as they're that scale the I'll Business able growth parts the little impressive we business back, is we

outstanding that on want our for just really time a that doing that consistent an just because such maybe and also to a job I long So, is appraise scale and challenging done team for make point at now. at really, it basis grow rate at to that,

to do. hard it's So,

Beryl Bugatch

well appreciated. and Understood,

understand I think, that. I

there the to any some just a you the understand took to looking Where you're that are population, one, it Douglas, quick for population as actions Just on at store last we – new anything issues platform. get in the is year or reduce Is more store better? that? on the you store platform

Douglas A. Lindsay

look our it, a Yeah. rest the over really the relocate? as looking close within need lot years, we normal our we merge? portfolio to I in to Do I two estate last looking at as or we're Budd. Are look What performance lease to but a at just mean, the assured, constantly of at going X-mile we need on the radius. be mean, term to need we're close of we the put the do that all opportunities know, real time. lease part we've at do assess. you as are mergers expirations addressed there we As But always process right we further in changing place?

for recent of great. other we but quarter the in a to our looking long work these is, We're excited with them, markets and those been from lot looking span The hard the maybe franchise I XX integration there. the franchise about we be has been of many now strategy XXX think a the and thing and want to up franchise term which to but acquiring over mention Out-West omni-channel little stores East obviously, team, at stores and of putting are distraction the at Texas they benefits that opportunistically they've to of to most this going Coast is is we're kind constantly on-boarded deals Out-West landscape, acquisitions, a

really excited So about that. we're

John W. Robinson, III

Aaron's I'll question has great team market? these we're markets, we to out kind to to – a how have in strong our done mobile to future store it's Budd. the model know go we is And you're very a need strong we question. It's something going to of believe an do There add the as platform that awesome that, look said, great a like, going these stores are how these we're we in. presence lot they have, know in question out think the e-com – job The what generally. different but very platform, need We in we're we don't to trying Douglas' you like And we than for will in has have may Douglas model that what look and many doing so get We asked process does that And markets. – think on have doing a go a think to is, multi-year figure of And it's direct-to-consumer as as job very a and more very say need markets. a great be is just that figuring – carefully, they're of that areas that what business there's to we'll on more is one-size-fits-all a out rural all process all managing now team we're we come I in work metropolitan markets. we And and the we out. in that figure figuring out. while would figuring it's of address multi-quarter, them it areas, great of to a

Beryl Bugatch

luck very you Thank balance and fourth on Okay. year. Good the quarter the of the much.

Douglas A. Lindsay

Thank you, Budd.

John W. Robinson, III

Thank you.

Operator

Please Jefferies. go of Joseph Kyle from comes question next Our ahead.

Kyle Joseph

on your competitive morning, sort late but I my wouldn't update I mind on you if if little giving Good missed of guys environment? Ryan, hopped a this, quarterly Apologies, and thanks Progressive us for but taking questions. the

Ryan K. Woodley

that. in and new happy answer much haven't won't and Unfortunately, response we a for in remains that apologize that. No, yet, I market. I'm got find advance It to question very you my competitive

continue aggressive don't experience out a folks from we that and that from those on out know to in things. there see referenceable opportunity we and base be to true puts place it play continue is we seeing us I to. play continues is and these entrants enter very know be incomparable and are less price-disciplined. when is that be all to calls, to a the to when I pricing previous We dozens thing to access the obviously The and you of Budstrokes some with we many said, what game know we literally have curves discipline continues large mentioned partner knowing and market out we what market scale every opportunity. And not think and other good that there in that maintain obviously as benefit of win market. the to seems to years having – in competitive don't capital each it and there who XX that But leases There so, (XX:XX) the try As to continues new experience, attract if it's market. and competitors

Kyle Joseph

consumer, the things. sort credit credit, as little just write-offs about we've like That up demand of underlying And transitioning of both and it said, the self-inflicted it. health of segments, in as talked producing a lot it the (XX:XX) comment that a could bit bit guys sounds attributable performance? about of little in both to Got me you then well lot to a a terms

John W. Robinson, III

out very Kyle, this say I'll seeing and tight a is that strong John there. we market are job Yeah, and

think, side. see I we that on hiring the

scores it's So, as wages I've credit generally and ever can as I remember are think tight up you read better. going getting about I it as seen or and

the consumer. So, just to at look macro be a strong level if certainly a seems health you environment for it from consumer perspective, a

a that's us. but options of been customers, tremendous historic is competitive for of have liquidity my a period also through for We created also in opinion and it's kind great which

– discussed. retailer change the in which increases or the of at for very rates that hopefully more as levers in you the Progressive pulled we could seen why know don't attribute – know what necessarily and seen yet, as rise if there the businesses, be we've direction maybe we be a mentioned, give both mix factors Business us. a there, But, never causes I something I have of of look tailwind will you in is on can it side tailwind in for the in us But a we don't exactly specific write-offs, our a you that lot that we've in point were and bit as Aaron's understanding you sure. but it some you we've could think little see both think future. us performance tightening of

best that's think the I can give So, we you.

Kyle Joseph

just any metrics terms us there's of out it. you can e-commerce, of how Appreciate of difference that we from any retail on of rolling helpful. sort Progressive in pure-play, partner, a sort specific as about roll give That's No. last me, then one And you if And you're though guys in there? out one a Ryan, different relationship? you think sense at, looking

Ryan K. Woodley

potential Yeah, of online. long-term of about the excited traction different The it imagine, solid little that's pretty early the proof instead as offering we're obviously case. you obviously is one we bit team Ups a retail is have for partner POP bunch and of digital pretty you story, about our e-com I'm and partners, these those. businesses. taking market. there, different, conversion are a having think well-versed thought expand a pipe can about dialogue and a that market, opportunity metrics will about we'll excited as a great and dialogue And flow, that to It in in we a a be I their look grow

Kyle Joseph

questions. it. very for my much Got answering Thanks

John W. Robinson, III

Thank you, Kyle.

Operator

Loop Please from Chukumba Markets. question ahead. go Anthony comes of next Our Capital

Anthony Chukumba

taking thanks morning my and for question. Good

recent this just shift franchisees? year, you And did that this then did signal of any and about the is I'm (XX:XX) thinking kind also, of to most franchisee additional does versus FDI it acquisition expect guess, going reasonable stores acquisitions, to forward? this doing franchise be in your last franchisee wondering, terms I and quarter, Company-owned one, the So,

John W. Robinson, III

new franchise for thanks is And – we're we mix the franchise right. Company yeah, think John, I any And we've about plus franchise, been XX% and the question. XXX months We've you're its stores. over Anthony, our not acquiring Yeah, have may XX so. or acquired last stores XX% opening markets

still We're to some expect time. I talked over think acquire an do something franchisees We have stores, the than in long the XX and are will more they're our for know, to of XXX to ideas, risk support that, for franchise will just and we opportunity. They going about big of there meets extent, on innovating said part Annual innovation It's they I term discussed business. X in We've there time about only past be the as better the out great intend do big great going stores us there's to perspective think, that, to are advantages you, the I entrepreneurs are us perspective. And Meeting control Franchise that we we've XX keep there's – opportunities to and having tell attractive great the horizon. we our continue partners, stores. we're control continue who a have percentage expect or of To markets. up. market us recently – and to plus great give some a like go excited Association would fact our But that. some more – our and a we business, getting fire had we and to market feet So franchisees. I the Company them left you have long that that from part a to

there scale, stores one XX could that you or And do so X talking left the just to know, And really, that. and two what that's and with is ability acquire we're or X, then you get we beyond having know, we players deals ability they into that, goes the do of as time at into large with and over down XXs fewer it the kind so scale, one stores. get to

know, acquire you in it you see So the won't we the you've is XX expectation will the probably on seen is is, months. chunks more, our My my expectation that but that it same. last in strategy

Anthony Chukumba

will is and opportunity capital guess going somewhat your related, is there be one there for largest my about are about lot landscape a earlier one to Got and competitors then I constrained that I private wondering, there. competitive Progressive? is the have in probably just it. you helpful. virtual out was talked That's question, an very And I question of owning, and follow-up question just was competitors of

John W. Robinson, III

Progressive, larger Ryan in Progressive competitive is continue talk advantage we competitive. feels to start for talking the strategic to very team our have one of us about market. I these and retail on sheet, is balance I'll great This take the What a the so, as the competitive John. Yes. real that's you and super of changes side the it of seen that. assets any that we I us very, real there's and for have partners, that think competitor the advantage mean, board. there had don't And we to if we I I that's the has haven't across we've say will and balance out that it's sheet will any have. advantage reality that. just mean I it a – of is, is other it's the said, say

that been So, anticipating just our competitive the doing, that's an make we we results. service to change any guys shift We're product keep we to is to advantage terms to that by trying landscape, us our continue that hope partners better, of to in generate continue for what providing I going that great will changes great strategy. our customer, and believe retail would these keep our any and aren't in doing mean, but have

Anthony Chukumba

Thank so much, fourth the good and it. Got you quarter. with luck

John W. Robinson, III

Great. Thank you.

Operator

session. over This John to like turn concludes closing question-and-answer to back our conference for Robinson I the remarks. would any

John W. Robinson, III

much on on our our Thank updating for quarter participating call. you in to very fourth look We you call. our forward next

Operator

presentation. today's for you conference The concluded. attending is now Thank

disconnect. now may You

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