PROG (PRG) 25 Jul 192019 Q2 Earnings call transcript

Company Profile

Participants

Michael Dickerson	Vice President, Investor Relations
John Robinson	President & Chief Executive Officer
Ryan Woodley	Chief Executive Officer, Progressive Leasing
Douglas Lindsay	President
Steve Michaels	Chief Financial Officer, President & Strategic Operations
Kyle Joseph	Jefferies
Anthony Chukumba	Loop Capital Markets
Brad Thomas	KeyBanc
John Baugh	Stifel
Bill Chappell	SunTrust
Budd Bugatch	Raymond James

Call transcript

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Operator

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

Second Quarter 2019 Earnings Conference call. [Operator Instructions]. the to turn now will call Mr. over I Corporate Investor Relations Dickerson, Vice Aaron's and of President Michael for Communications Inc.

You may begin your conference.

Michael Dickerson

good XXXX and Inc. you, morning, to Welcome Thank the second quarter earnings call. conference everyone. Aaron's

morning this and Officer; Aaron's, Douglas Inc. Steve Executive Lindsay, Chief and Woodley, of President the Operations. me Aaron's, Aaron's Inc. are; Joining Ryan Progressive of Michaels, Officer of President Officer Strategic Chief Executive President Financial Chief Robinson, Leasing; and John business

of you our release have morning. already of copy a Many this earnings seen issued

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

During the this provision certain we of release. end Harbor can for your call forward-looking. make will that call our want earnings to I Safe statements to forward-looking at our found attention statements be be

risks for December Harbor risks forward-looking of content SEC XX, that cause the from to the differ XXXX see year our XX-K and the our description differ Safe may ended to materially to forward-looking provision actual business our may actual related of materially cause results results The from the Form that a the please for our statements. subsequent filings statements. Also with identifies the

non-GAAP forward-looking not EBITDA and with On update adjusted EBITDA, Listeners of undue are which our non-GAAP other the which comparability net obligation including been measures EPS will and may certain have certain financial call, items performance statements to and be no emphasis we any cautioned undertake on today's adjusted we statements. place affect to such referring companies. for earnings to non-GAAP

financial them our company's that earnings performance. comparisons assist of in understanding insight the detailed believes tables company's ongoing facilitate with and periods measures to results help release. non-GAAP in flows to operational cash provides performance provide prior company The the operational and these meaningful investors measures with operating included to into these and non-GAAP are measures the These reconciliation

ASC-XXX, the information quarter year-over-year an In a company first provide release, some accounting a to of equivalent new standard table XXXX, press the to adopted to for leases. revenue the on related basis. added our with effective comparison you Lastly have we

Throughout assumed year comments related adoption standard the these items to that make I've compared. of prior the and with period certain was today call the in this beginning our the comparability at we'll made of each comments new of

over With Robinson. call that, will the to I turn now John

John Robinson

we of thank the continued reported Thanks, all we quarter in for The XX.X% us start first On in Mike. you joining second the today. through strong to same over growth the achieved the revenue consolidated basis, quarter quarter. And a year XXXX.

primarily invoice This of first the closure increase Progressive half XXXX. at of XXXX, acquisition franchise of stores strong a in business in and partially is offset locations result of the Aaron's Aaron's the by continued underperforming growth

and EPS XXXX. and an quarter. invoice EBITDA Adjusted respectively experienced of quarter in XX.X% per share first quarter, from from growth diluted second volume both $X.XX million were up prior-year the meaningfully over second Progressive's $XXX prior non-GAAP XX.X% year the the acceleration grew the

strategy of our quarter, in earnings. lower than a retail balance pressure which to The despite existing new portfolio performed We're in maintaining grow revenue investing put business and and the encouraged relationships. expected in and growth accelerating Aaron's this well people by beginning are systems on partner

we're advance initiatives doing direct of to for future the I'm to remain optimistic drive the manage invest maintaining outlook the previously We to revenue are Aaron's business business. teams our annual consumer and pleased omni-channel our strategy. and in to provided work and our with the costs continue about

of quarter below and million. well liquidity we into adjusted Overall with debt net second turn remain the $XXX of a to conservatively available ratio with capitalized approximately one EBITDA

shareholders. to explore business, to balance invest us return provides strategic strong continue to our capital in sheet opportunities flexibility Our and

XXX,XXX During these stock cash approximately repurchases we of our and $XX shareholders our the quarterly common through dividend. repurchased shares million quarter approximately to returning company's

over discuss turn quarter to now will call I Progressive's to the Ryan second results.

Ryan Woodley

and Thanks Revenues John. second million profitability the we were The trends Progressive XXXX. the quarter growth quarter of XX.X% second $XXX compared strong experiencing. have the delivered a been team in as great quarter, continuing up second to

Revenue transactions in active increase driven in was every driven growth invoice a door vertical. quarter nearly was per in significant XX.X% in invoice by volume increase by the year-over-year increase a increases in invoice per in The from door active XX.X% lease per resulting strong door.

was second active down XX,XXX, Our second XXXX. X.X% quarter count the approximately door of from quarter

per door, towards growth larger total indicator has growth, and count and retailers. future overall footprint become door believe of as As invoice less our shifts predictive leading online revenue and active particularly accelerating evidenced we mix by as invoice the a

EBITDA as in year, the period. compared same consistent ago primarily revenues, was due XX.X% year the from increase On XX.X% to to XX.X% in increased XX.X% last increase period EBITDA of point of XX accounting the basis the a basis, revenues. an

in by was gross level was margin increase growth of the as support by margin activity. to resulting The well in offset lower pipeline driven XX SG&A margin a The investments XXX expansion future partially buyout partners, from day increase gross a primarily point EBITDA in basis as conversion. existing of retail accelerating

the basis, XXXX accounting year the of Also of to calculated X.X% on in quarter were compared in a second write-offs X.X% period. ago consistent revenues

well this expectations. of lease continue metric, are and the with pools consistency perform to by line demonstrated in As our our

provided. team profitability job that executing Our portfolio account to in an excellent ranges deliver lead shifts results Barney designing while decisioning enabling the doing risk is mix, strategies us within Tanner and ongoing of for we by target

we're effort toward for significant remain best the providing the with about pleased and team the second I'm of credit possible I the momentum the the consumers. experience year, carrying half has made challenged excited into

to the I'll now Douglas over business the turn call quarter second results. Aaron's discuss to

Douglas Lindsay

business pleased portfolio the period despite balance with second I'm a the with of Ryan. the Aaron's performance Thanks, expected. entering quarter, the in lower than

four year-over-year have improvement XXX of consecutive to continue and points. trend of represent up Same-store the for quarters, year. the this revenues and we expect for a revenues near were X.X% quarter second half Same-store flat in basis the been

portfolio, into a the quarter, recurring the in a In channel. increase written including returned we e-commerce revenue XX% year-over-year our positive

recurring revenue written a of reminder, key revenue indicator is performance. a into portfolio the As future

X.X% last the same Revenues to compared to primarily XXXX. the driven by XXXX. second year, quarter as revenue as franchise of acquired X% quarter compared Lease increased increased in the stores

which is experience. Lease and younger omni-channel the who benefited to second aarons.com higher our ongoing platform key from continues aarons.com the of customer in revenues also investment strategy our attract mobile growth quarter. its pillar in shopping ticket strong the a prefers continued

from X.X% due losses timing to of declined write-offs, XXXX. year million offset partially marketing of spend Adjusted primarily the EBITDA million X.X% hurricane and quarter. by Adjusted or revenues XXXX in the in $X.X insurance planned EBITDA and was decreased $X.X versus incurred ago higher a recovery X.X%

and Write-offs increase versus was revenues number in XXXX, write-offs first X.X% mix XXX the offerings, in leases, the in the increasing and of were revenues. a of higher in of same X% an as stores of period of increase closure of ticket and half planned the promotional year. last to type the percent Contributing the e-commerce

store includes repositioning investments first our of closures store and a concepts. merges, which store of continuation are Our in relocations our strategy, next-generation market half XXXX

net and write-offs of in the to were on believe impact closures margin closures customers results unfavorable improved locations. performance We transferred future Aaron's initial is these other primarily who store will on this periods. of impact result from in temporary, The the attritions write-offs

programs progress marketing encouraged Aaron's new in in the our I'm the the We improvement the and by the redesigned training with incentive delivery latter improved driven of we're response believe direct activity sales including making and primarily this business, plans. part experienced quarter. is a

strategic initiatives scale key We're them initiatives, as and continue improve to more drive We the to customer evaluate we'll their to experience of these broadly. in we continue pleased operational with invest efficiencies. results the progress and

to now over turn Steve. I'll the call

Steve Michaels

Thanks, Douglas.

Now, some the financial quarter. I'll highlights review for

of a ago were an XX.X% revenues second of a On the period with of ASC basis XXXX million, a XXXX when quarter consistent consolidated basis, the $XXX.X over on adoption year calculated same XXX. the for increase

the same basis. XX.X%. of compared accounting consistent $XX of the company or in of an $XX.X million EBITDA for this last constant XXXX for the was year increase of on second quarter Adjusted quarter second of $XXX.X Adjusted revenue XX.X% quarter XXXX EBITDA the million, period second the a year was to million with for

XXXX the year in million operating the expenses compared increased prior $X.XX Operating to XX.X% $X.XX of quarter. in EPS Adjusting the versus second quarter million. expenses basis on $XX year the quarter to quarter operating non-GAAP XXXX $X.X second have for to be reporting, the in the of increased period. expenses ago Diluted with XXXX decreased approximately consistent would

into the The the costs Aaron's half write-offs operating The evenly quarter the the and at increased in the business and expenses business. acquisition relates split Aaron's Progressive between of stores Approximately increase of relates spent incremental to Progressive. XXXX. marketing of planned acceleration throughout balance to personnel second franchise

approximately result of closed as the restructuring primarily Aaron During of company second store charges charges company The the stores. existing XX associated impairment recorded portfolio. consisting store the with million, locations of management's $XX.X closed the of review quarter, strategic a

the Cash in million months of ended compared end $XXX June $XXX six cash for XX, activities the we at with and million generated from the quarter operating was to XXXX XXXX. ended million $XX

a additional unsecured of April on balance notes notes principal is XXXX. until senior our scheduled on $XX our million, payments with notes payment million. made principal senior we scheduled no outstanding April, The $XXX mid remaining In unsecured these of of

per $XX.XX shares returning XXX,XXX capitalized cash to of the $XX We share of quarter our adjusted the through conservatively remain million company's turns. During ended million $XXX common net of dividend. shareholders approximately and repurchased available and the second these with EBITDA debt for X.X approximately ratio liquidity a quarter, to stock our quarterly repurchases we and

You we've outlook XXXX. for updated our will that, note

to a per half the the updated to the to our in have EBITDA range low for double-digit an our our raising segment. Year-to-date, continue and to for year $X.XX we from are of continue do so of to outlook consolidated to reflecting revenue the year. we primarily XXXX. as adjusted Progressive in growth Progressive $X.XX increased achieve high We range $X expects $X.XX We've growth of achieved EBITDA strength of outlook share second the EPS expect rates to balance

that lower entering consolidated the full expected than results previously we are this strong provided the reported for quarter. pleased a outlook second are year balance again we quarter, Aaron's portfolio Overall, Despite the we business. maintaining

to questions. turn your I'll the to assist taking operator that, call with the With over

Operator

Kyle from go comes first [Operator of question Joseph Instructions] Jefferies. ahead. The Please

Kyle Joseph

for morning, provide want business. of the guys, Hey, us can a Ryan, sense us a could any good Progressive you the there? color recently on you to with give and with if good partnerships on I just quarter. start rollout side announced the the congratulations

Ryan Woodley

their the all and folks those focused teams continue together. excited they're very and specifically, where about them and to for can proud Kyle, opportunity of for ahead but possibly Hey, pleased about mutual we're with we we're stores best how really the comment with excited The happy won't I going. be question. working thanks and us. at what of them to our We on executing accomplishing on obviously for customers. the hard. We're with we're are partner We're

Kyle Joseph

then a then refresh sense And for and you this the on us if question your the capital is for it. much Progressive well? allocation of the just Steve, us grow Got as plans existing how the balance I model probably give on business efficiency can And just can think cash sheet?

Steve Michaels

of pools great very and of with conversion Yeah, as and growth the the month many has as the over you're generation but efficient cash which elements lease a months relates the business speaking efficiency and cash I The seven to mean, Progressive of I Aaron's cash has specifically. quickly it one life a because its an of turns that's Progressive cycle. beautiful well, average assume model, of very cash XX

in last So we have the call generated it has cash. grown and mid-XXs years has the several and Progressive business

grow is of strengths timing of sheet the but then on our capitalized to one depending obviously could still certainly invoice, And beyond in sell balance conservatively it XX% and and of access that, the fund, excess liquidity. our

growth will and but rates opportunity So, that levels the is, growth that, if that it dry very be at some fund. can we've excess to got those sell size plenty are of able powder in of and nice Progressive the support you to

Kyle Joseph

answer helpful. a my very questions. lot That’s for Thanks

Douglas Lindsay

Thanks, Kyle.

Operator

from is question next of Please Markets. Loop The go Anthony Chukumba Capital ahead.

Anthony Chukumba

and Good nice congrats me add well. let morning quarter my on as

particularly you which a had acceleration So, have guidance, your but Progressive for the per our door Progressive made year also revenues growth Progressive's by for year. raise terms including invoice year active quarter, And of sequential guidance basis. your stack I just two obviously, you had EBITDA the for raised a question, in for great didn't

So I reconcile to was of just you. that. trying sort Thank

Steve Michaels

double-digit believe we've And about the Anthony, back Steve. Yes range, expect achieved the we but remarks, as this noted or half in of or said front to the the half delivering change that we we year. low prepared continue we mean year we consistent in thus the of tighten year-over-year not is and did expect rates that I talked we you in the been the as we revenue trends far. growth

Anthony Chukumba

Got it. That’s helpful. Thank you.

Operator

of next from Please Thomas Brad KeyBanc. is The go question ahead.

Brad Thomas

I debts we with Hey, about good maybe, move I and And little hoping bad guess bit morning, talk Ryan. great could then start we quarter. more to in over could Douglas the trends And a and write-offs. was

back you could how if the that your you're of talk as the expectations changing about half to and year? line seeing that's If item business relative how is different at and playing the we what out outlook in about all segments think for

Douglas Lindsay

Brad, it's Hey Douglas.

by few Sunday now, call. mainly has driven promotional and that's acquisition our driving of We've new also attracting e-commerce this talked GAAP and customers. experiencing all quarters. new last door. in the last opened customers We've over I new of the write-offs we is quarter the customers. about As our a our this mentioned which more written on into new that’s mentioned, strategy in been attracting been It elevated our portfolio that mainly the believe We've lot on XX% of stores customers we

So of higher seeing each new all the we're the entering pools, write-offs. into with customer

higher store on just And the this close bake customers XXX increase the did into we into months customer or first away in this We temporary mention our closure we merging we also from the we're customer longer we of and but underwriting increase them to decisioning We moving all the doors, happens. another. that due home our their service seeing in is the experience with when best one we another move can to connectivity we're call, And them, our when as a six year. basically the a write-offs stores and do from store. of write-offs of to

on So will a we're write-offs. ROI of the period we happy increase have decision, but that with temporary

forward the higher We expect in that's in just due go all promotional to attracting have elevated customers with our we and new e-commerce a growth rate, guidance. reflected write-offs as strategy, but the to

Brad Thomas

to write-offs just through clear And you be the higher do to so, continue Douglas, year-over-year that probably second the half? be think

Douglas Lindsay

the merger would expect, settle even an write-offs elevated we down. Yes, yes, amount of once

Brad Thomas

comment you of write-offs Okay. you're more Great. And bit about about could how Ryan, a thinking bad debts?

Ryan Woodley

consistent combined activities, own team write-offs on and prepared we strengthened very is a positioned and X% know end basis debt provided the X% didn't excellent accounting X.X accounting I'd and a same their mentioned you doing was to is delivering for don't in our last to well year. assistance think we’re same remarks mentioned year. that just I range was versus flat decisioning debt annual information ago the and that payment but versus performance. well as that the We on I write-offs, say, X.X, XX.X% Yes, as basis the -- we were bad revenues year on XX.X% bad we've it changed accounting, of

Brad Thomas

you're coming is of from active some little smaller be about, bit the big we work year-over-year versus down in if today now? much occurring to Ryan watching a door growth, just break maybe I from large don't you ask revenue or context up you us how specific number of could your more revenue you think thinking accounts, right I out to where And at from but players and regional little particularly the for seeing growth bit how about flavor, want that a is that with give these national follow accounts you us more help should what coming about some of bit little a know a sales could Great.

Ryan Woodley

talked happy indicator invoice, to. Sure, leading about We of lot a a revenue.

I measure invoice, on seeing base. see. per focus the the we're actually did broad And record that to productivity per a we So as was door, strong I by great level invoice in increases which mention quarter mentioned was door. was volume that driven It pretty which in

obviously and are with that the portfolio to partners teams some existing for grow new to productive working the also think nice are us. additions hard benefited them. I well our doing from We've

their those help across are the and we've accounts, those they're doing pleased of the great. driving continue, given Obviously, seeing the to trying through of focused the scale, larger been expect big to funnel portion efforts But of we're that drive the the of convert them funnel partners with top really a our just on to and trend and optimize what more we're we opportunities bottom to book. growth but our

Brad Thomas

much. Great. so Thank you

Ryan Woodley

Brad. Thanks,

Operator

Baugh Stifel. The of next John question Please go ahead. is from

John Baugh

if get we longer rate, there I you. is XX and retaining count to side, out in and might changing this or to of are John store moving of sense could, sort the guess a Thank morning. or wanted still is Douglas, I similar in sort we and for that term better the I months on after a kind Good sort closure anyway? and retention a is where

John Robinson

Hey, John question. John, for the Robinson. thanks It's

think is we we the pleased really we'll evolving in with where stores. evaluate in of that that our fewer and ongoing potentially hold. ability terms to process on the continue I market that omni-channel settle growth as broader kind to been of of out think, In serve with a strategy stores, We've takes e-com kind an

forward. the have e-comm expectation a we mature probably includes number, continue can't be We because have and robust as probably the We of which stores we'll that in certainly market, as less mobile metro our data. honing exact market, from a platform by fewer kind move of platform, more example, to learn in, stores we're we think you is, today. on But, certainly, the we number than in market tell say, for would the the

going. direction broadly the we're that's So

come results good been retention Douglas having that customers merged is to with the retailers. continued advantages reason of is in mergers time. have and the emerges, incorrect, this we're over In the terms And but kind from these of we we and we've the traditional the versus runoff one the and of I'll have if of that. That's to close pleased do predictability that's let

do stores the base. of We portfolio with recurring these have a leases in revenue

that performance good into there we've ability been is, we've and apart, strategy. and accretive we another then, And a depending the seen a standpoint close profitability one our away we've that stores that. store so, from of execute merge to to And continued on predictability mileage reasons that's is around retain we're the component, the far how that but with pleased and are of when

Douglas Lindsay

Yes. that The the we're only which thing part next-gen to a John stores really opened all store this refine includes and John We engineering add is, rural to the as strategy, is we're marketing footprint relocating our optimizing versus of closing I'd of, in market larger stores, next-gen plans, market doing. opening our quarter store of six concepts. continuing urban stores and what store said, the national and our repositioning value

cell a the sort productivity and that of and model, things operating see in the the also greater we I we're model that we're dollars digital through but in being of collecting. more doors, way momentum think spend the now in operating convert our walks the centralized getting our the efficient magic -- and like customers decisioning to our reducing in and up our is free just starting we and doing a lot to get what right not in people

continue we'll to to estate strategy. that And with real pursue so, this

John Baugh

future question a talking ever but has you -- Progressive I for going Aaron curious I appreciate on frankly, we're that on Progressive said, with, could, quick the spending rollout Ryan. been since you're if I'm Okay. growth. the to retailers get of we're the And not in part for then,

have too you're with. about to your get you're you some spent the is thought? or Thank retailers growing is because we of than business saw share we do know, have sense faster is, whether growing the maybe you And you're spent what but we you on are in terms And and hold having talking the you. much, ready, a necessarily, enough infrastructure based off, again won't maybe it where you of have question a or not trying pace

Ryan Woodley

Yes. question. Thanks for the

served based in XX-plus-billion-dollar of market. large comments. in think that derived underserved we We it's well is we believe broad our really business it's Obviously, the have just very of a we fraction which which interest merits we're market, the a why and of the being bulk So investing. currently a capture of belief positioned, investing positioned the opportunity, think sort that in from well is is fact to the

I'd in with pace pacing to to expansion been we've be say, that in pace been at which we're of do evolution the pipeline. at the that And think, pleased to business measured. I that generating we've while has we've that We and very very with about investing investment pace been pretty able well. managed margin the the thoughtful try

very that that say of and handle made to team and a we -- that our we in talk is. the And lot is support people sitting any I'm systems infrastructure about in it and in we've I'd pipeline. confident volume it's appropriate what investing able really the can that investments be to

feel extremely an invest and today, good those where every our any has the we're good in across at, talented and And the all those, about year handle over have to the to can of pipeline about functions last one out ability sits we I I the We so I business there. grown that really opportunities. continuing good in we're those about where opportunity feel manage feel team

John Robinson

only not to the of a for while standpoint relative but us and ability feel now, business. I an said pipeline to all capital front felt of ever right. think ability And from that today we our us a just capture John, say, manage sure the in the things I handle in in standpoint, those from better really operational front have I've it been than our this of is having to aspects Progressive around all Robinson. opportunity Ryan John I'll exactly about

repeat I'll capitalize the this But So balancing we've of I opportunity. are the usurp it, but team and great job think -- EBITDA the and a on this managing context said and have the we business capturing on trying it it's proven opportunity because the and such to retailer margin right important and of just want to has that every and be to we being incumbent, opportunity just being big to focused to done to really we the to is over last positioned more capture in the Ryan past in the a are is margin dollar continue of big of margin, we very kind than now, And continue first well just think time win race. market. and

have right We of on the growth team advantage an really rates, now a years. want a consistently number have these product guys have up we think put to we for for continue in and we which continue of market standpoint that now that and and wins build have so from these these to can kind to advantage,

John Baugh

you've I'm rate in whatever? competitive somebody Hey, it Obviously, and always to approval is quickly. your industry there's Obviously, I and change a and cited, competition, know walks curious are offers you. that a is in changing John, which impacting always you in capital. really a better but seeing rate good, any you? this Is it it's front Thank that the margins growing on landscape. competitors conversion just or Are attracting degree,

John Robinson

capital like it providers. and Progressive and Aaron's It's more Yeah. awareness feel higher the it's All among definitely. attracted competitors when we back I question. good around mean, more the industry acquired way a has is the to

ones like kind those serving enterprise probably to it certainly a and are as large market. serving of who seen think is we team I ever serve who competitors of in are we've have competitors the more regions feel real accounts. the large the a product there unmatched retailer. than versus So I the

to lead the I to got as some on keep before, investing got to We stay we are think there out there. But and our continue build good definitely stay And we we we've to think the ahead. toes just it's best have provider mentioned there. to want on And competitors. we've we're

So of that's what part you see.

put better to enterprise But all able to ask getting across functional investing get about be has pressure competitive, how And we keep you if better remains and the lot we're been out competitive, it the we're always provider where changing. areas it. investing the there. it have a the that's whole market. ourselves we of it's across in be best to think Ryan solution the And to question, just best And on to continue

urgency have a always how change and as and a we We're working get and as great we we pipeline sense product of great of grow down roadmap and need feeling fast of kind improve that to to and can. better we're

John Baugh

Great. Good luck. Thanks.

John Robinson

Thank you.

Operator

is The go from ahead. of SunTrust. Chappell Please next question Bill

Bill Chappell

Thanks. Good morning.

John Robinson

Bill. morning, Good

Bill Chappell

A longer. quick questions one few and hopefully

a or they side, expect I level clarification Aaron's guess for the next the you Douglas this lower? go On they the to would before go be just quarters at little more of kind write-offs higher few would

Sunday openings get the as to lap some store And the we by the then also sales growth time we fourth on same sales what's of of quarter? to kind outlook on the store same start

Douglas Lindsay

Bill. Yeah. Hey,

just stores Just the end addressing at We the the of of second the quarter. first. closed day set write-offs seven

closure as kind third quarter what back see you're increase, in settle seasonal I end quarter would to store year-over-year expect given it sort I seeing where should here same second moderate in expect adjusted pace. in expect third will been points our that's we've you That about to of see of the quarter second what year-over-year. basis the down. So towards the you've the the normal seen will XXX the up the but for quarter but of year, And

normally they are new and at they've of customers higher rate; do. write-off two, book just off think a customers pipeline, that the because the write I new to We higher one, drive will writing value try as to into a got off; higher rate continue assets, they're

We I'm another And as far of proud of positive quarter comps. as comps, had same team. really the store

last XXXX. think as since recall we're XXX year, first was basis comp points our I first you positive over quarter

What team importantly job has most leading this the probably was done So attracting on which year streak that revenue the about. the into I'm continues latter on and of saw seeing. and part We're the written an that last we excited excited were customers we that. rebounded that we're which is quarter key we about up recurring of more awesome quarter, from strength portfolio, our indicator in new

coming the that year-over-year. X e-com the and driving that incentive So that I now X.X% mentioned to the reinvestment and this traction, is kept about call and We these a with of was ourselves that our right and see it course, to revenue get within will we've year. XX% in on to of we portfolio X%. guidance along of at training be into up flat What's lot merchandising continue guidance strategies and sort and put marketing sales that programs we talked the for

us those with So helping all considerably. comps are

Bill Chappell

expect your Got then Ryan understand this this little to trend while as of relevant level to are expand customers get way. worse? that XX you to your others being Progressive. your shrinking that it down existing get for faster? does -- less it store in percentage becoming less door a certainly door will terms commentary count a of at bit but year-over-year, and counts that it. some points start And continue be there's and Does I Do switching better

Ryan Woodley

question. Good

seeing in specific drivers talked we're of So, the the the business. we currently about decline

there then we nice XX,XXX additions inside the one drivers On decline we some from of our the overcome by mattress the partners and partnerships existing as did number, from mobile two call and in of on base that of the have well. in obviously, new mentioned last

the comping win declines those still platform. year. doors to left and being there significant throughout on this are basis we'll of still that be there out But said, obviously So, onboard

So out opportunity that is there.

the headwind once then we just base that by seen reductions, that those those has obviously, two specific won't was it be inside growth as declines. on we offset which of two some And comp existing well facing

comping and we've answer year it be we'll comping So, for some we'll this going to is be grow -- those short forward. got opportunity

John Robinson

this And Bill, obviously, footprint lot opportunity the larger is in John the and/or door. our type is e-com a pipeline of

seen other lot have So, the the much can we of with necessarily without might as as moving door in metric of types invoice they bring a past doors.

us system. we that for productive just the years case been as to the last of for doors the had couple So, coming very has

Bill Chappell

versus customer were how work because you signage if does question. Ryan my Perfect obviously in kind to it the just different that e-commerce how a customer, traditional have is last Just the different. of terms segue large of is signed interaction ramps? quickly into the maybe door, online

a And revenue it's has longer so similar or much takes I base retailer if faster? bricks-and-mortar don't that if a significantly much, know than it

Ryan Woodley

the as have being on to which being online I significant extent nature Fair be partner-to-partner. similar question. corollary promoted would the very all the level dramatically integration the very which teams site both opportunities. our of those the in offering a with and will and the offline expect growth of on of our the between -- and and store a say of on the is in depends POP collaboration I the And partnerships promoted pace it it it is to to influence

going. excited We've there super spent about where We're our about excited the technology I'm with we're as offering well and where time channel. and investing a our of at building as we're resource lot out pleased team.

a retailers past develop to e-commerce is broad over we help as need done goal the customer Our to the we've decades offline. this two serve base of toolkit

and we're the opportunity think really very online years partners. the a were on that execute bullish think it's business large I of future. uniquely positioned online help big portion a sort of We for and to mobile on representing I into strategy

Bill Chappell

Got it. you. Thank

Operator

James. ahead. next of Bugatch Raymond go question The Budd Please is from

Budd Bugatch

maybe was gross taking of properly from think I everyone. the expansion XXX due for Good questions. Ryan my margin about bit the you recall -- the some lower I that's of health penetration commentary Thank verticals from consumer? Can whether that curious you credit us significantly basis in give little challenged that. the any of points of XX-day be indication may talked due had morning primarily, that or about about some you what of if color talk I or a

Ryan Woodley

will Sure do.

So, go variables not of an consumer of really give that's a I'll a lot of our that the the necessarily and And examples. mix. the function of into health shift mix. you artifact portfolio some there

QX, QX. customer the see new partner its a to things a XX-day buyouts rates saw growth so influence on the bit may in level from of of in it, if we have a onboard that portfolio, of can pricing, level XXX we partner we have all expansion points see of XX-day, moderated influence when different across based those of we different of to basis organic of composition. ability levels naturally growth XXX level a the that So, their partners If overall different that XX-day

to continue We expect depends especially on invoice, the it just to new added. being moderate it mix and really timing and invoice of

Budd Bugatch

what helpful. in look does progressing? Douglas that? doing And many rapid are that's Okay, How that how like it the And onboarding stores is portfolio? customer

Douglas Lindsay

working e-sign stores success seen processing lead which the that, most you and testing like been interface of us away of they the all offer in onboard products been about helps We've to about probably XXX is in on and it where uniform is digital store. the great a digital of takes customer processing our a It team our versus sitting way. considerable customer it love a leaves through and convenience stores. it the and Glad to them because us What process we more them labor asked, our adoption, docs send at hard docs, it. can and them the in the Sure. we've onboarding members amount with out also we've to

think that following digitally allow we we the out vision and really onboarding what there, then platform the decisioning, tell by on the power in you of right we've of, results where now would you first fill a be of you with optimize year of customer size And that light In the end if and go stores probably the Aaron's then you we tablets, it we in XXXX. to your experience then shop, be and is and your continue into an leasing digital coming of tablet. is will check every half to and come and of information it, sort our it store, in in terms seen tablets to make, with decisioning the store should shortly journey us at that's strong the

John Robinson

one add I'll But thing, this is John.

Following the Douglas parts onboarding of customer exciting as know, the our this last said you set an of and it questions, rapid business evolution of business, is about one well.

in -- transformation But his Steve steps and we they're doing amazing sequence a it Olsen job John and and to that. it got an team; got Douglas through going right, we've doing got they're We're and executing do Smith to it this. do to you've

exciting to customer things manage at One and is advantages centrally That's different about off to on parts our Progressive one it's of than we in to that gives it ever agile, of it onboarding very rapid at have looking we we've get which we do huge Progressive, place But better risk and can't Aaron's. rates able and be us the margin changing been turn the pools opportunity and is do a ability adjusted ability that will the approval really to to before. customer you're much better the do ability, once onboarding rapid dial-up of can point, can that agile change we you for. your at risk

it year benefit hugely And the but really get the a Progressive but in big it's we we're about side Aaron's this don't the in guys excited us have of there that future. helpful been getting on the opportunity

Douglas Lindsay

deploy have selling data well. we which Budd. I'll capture conversion labor and hours as into great Yeah. get of we this data just add, and are the can all One benefits last additional process, thing, sales

Budd Bugatch

end now in But like year, -- but you it's going up XXX said XXX I where have to thought earlier. understand to I in was stores think the from only a it make you're all sure I it right of it. that's so by the

loading really XXXX? -- and advantage So a opposed as backend it's XXXX you're to this

Douglas Lindsay

Yeah, our we with year part comfortable first by let in get the that on process XXXX to decisioning part and layer throughout platform that's XXXX. end checkout and to get clear. going going of the to be the We're the benefits should will of of we our me in stores and in the the the all have digital associates allow process

John Robinson

have But clarify decisioning… to XXX in we stores and further the plus today, the the digital

Douglas Lindsay

Yes, them of there. we've both in

John Robinson

…which pools to the a of decisioning. of has lease lot understand enabled us performance on data and get to based

Budd Bugatch

Okay. And last me. for

more you You under to my do some close balance of is closed the year What’s at the about said. XXXX? of we quarter done right if for going the stores like? or the size well well math XX pretty end look are mergers you just Are of

Douglas Lindsay

mean, don't the follow I closures Yeah. our the any between scale end process, going Budd. now year. normal we're expect large But to of we and course

Budd Bugatch

for the balance very the of much. Good year. you Thank luck

John Robinson

Thank you.

Operator

Loop Chukumba Capital The Anthony Please next question is a go Markets. follow-up of from ahead.

Anthony Chukumba

dip allowing me here for Thanks to double bit. a

update the new and base? those from of an the the that. some concept know impressive the some concept, task, the out results you've you. just about rolling pretty looking guess, terms from So store you I for was of that I rest Thank to seen I talked learning in stores store briefly

Douglas Lindsay

to We're needed imagine we've had to Sure. needed optimize we the hard get of store up we it been that top-line and model. could right and spent We've drive the we now to where to prototype new We opened initially stores with might learned that. concept. rest that XX we to as the working drive a spent volume. do store what We you the

and or store. model on refining out in labor engineering the figuring is we've what been so new value build out our really working And what's

as and new part with then look in main we have experience offices, stores. on so remodeled showroom, removing you brand dedicated and larger if have and pre-leased showrooms we've digital the that servicing put talked interior, lot store the onboarding those mean, about it's we shopping a exterior of we in and think and a that. I really centralized we've from completely RCO, within Layering there virtual concept areas pre-leased. And learned and static our about it's a new servicing they're the totally

a model but we're optimize we've can like operating thing engineer, us within the that give is we periods learned biggest we can The lease return signing. the now to value

pace us out confidence. allowed it these gaining we're We've also build that better. our the of And of learned to So that has with stores confidence bigger accelerate slightly of operate sort stores.

that as are in So put team think previously. more real terms a And on way where number of we've about we the we've these estate we building things. much pipeline we of strategic markets and the in is stores a the side got communicated

a fits all. will not So, one-size be it

within foresee resources. shared hubs that store our store Atlanta, we're having future density a about be put potentially But in might have Pass remote stores with stores surrounding Aransas we may smaller through optimistic than in higher nearby. We more smaller we is have the in that really we other concept. Texas, high may a So, and stores markets, satellite serviced could the where

John Robinson

your Anthony, add sure And to just question. on I'll make

seeing Some the great have of the team of the results, the Douglas system system kind from as customer digital we've scaling things about and concept been we talked whole the announced, that adoption of customers just this just pieces year. new we're and that customer of that’s across we all and one tested scaling from seeing onboarding, feedback store the discussed great already, across

of that part our new training. now programs, store in and those projects we incentive two the some system. and new And learned also whole are new also across scaling We've we're concept big effective right sales was are adopting

system. So, effort this transformation that these are across all things that have part been getting whole of the are

process get to about that term part, prudent more we given that trying involved. just spend a to estate capital. discussed, Douglas real as there's we're that The very sure right, how is longer want make we're We capital

right and little it, out as the a and awesome component. by done big to be a And his e-com job have refining Douglas different mix it's said, market by going and team there's Douglas going be figuring to market. So, an we're

Anthony Chukumba

that will helpful. that's reasonable going in I transacted these a to more these door volume one layer robust reseller? per the think lease strong volume be lot it, wireless than active you growth vertical. obviously add increase that progressive hosted And last I do driven active then in to to growth door your partners, mentioned who by it is every as invoice is a larger as question, was per guess invoice are in you wondering, just you partners larger quite Got nearly expectation volume continue

John Robinson

going given toward average that's I'd coming to but It's levels door as true from we be mix of productivity to the yeah, also say going as yeah. just higher We're true. the whole, those On well, Anthony, doors. see how online more online, shifts count

Douglas Lindsay

existing with sure with doing understands I equally job Ryan volume existing But that, new thing has want emphasize amazing doors one big think bringing an of an of footprint make in I I the we partners. have job driving to retail done is, admirable said And our everyone will doors. earlier, more they're team the on retailers that that

the job lot much done existing a of the an So successful numbers. excellent of investment, and the these more partners that's to investment is And has our doing that up that. of make make we team showing in

Anthony Chukumba

Got helpful. it, that's

was revenues, clarification. just last one increase just e-commerce is that that The sorry, And or in in Aaron's XX% overall? the business

Douglas Lindsay

that our in just in we Aaron's XX% the indicator. just is last which further clarify not put leading we did business, what to XX% and into number, of year. the That's what recurring but than it's the increase a That's portfolio, revenue revenue written higher into portfolio

Ryan Woodley

you expect. recurring the effectively It's that revenue

written have we've It's the portfolio into you payment. recurring a at you just aggregated any the payment that period. about If a transaction, think given recurring

Anthony Chukumba

That’s thanks so helpful. much. [indiscernible] and

Ryan Woodley

you. Thank

Operator

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

John Robinson

outlook, we execute updated team must is Thank strong the the recognize summarize, task. by the half and We plan to our of our our continue up to are improved you. we results indicated to with first achieve To pleased on XXXX.

ongoing Progressive, business made with pleased and by being are transformation We performance Aaron's efforts. the of and the its progress

thank our to of and you us our thank high retail associates, I'd like customers. joining to dedication all to products their much for providing very today. partners franchisees quality for And

Operator

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

may now disconnect. You

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