AAN - Earnings call transcript Q2 2022 | The Aaron's Company, Inc.

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Operator

Good morning. My name is Charlie, and I'll be the conference operator today. At this time, I'd like to welcome everybody to the Second Quarter 2022 Conference Call for Aaron's Company. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a Q&A session. you. Thank Instructions] [Operator Mr. begin may your you conference. Hancock,

Keith Hancock

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

Joining for and copy release Douglas Steve are prepared seen remarks, Financial me a Chief open our of this Officer; the issued you will Executive already call Officer. Lindsay, After earnings Olsen, Many Wall, yesterday of Kelly our President; our we afternoon. our questions. Chief our morning have

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

cash adjusted cause our and and may supplemental EBITDA, to our business identifies With be we During turn measures, to other non-GAAP in certain outlook our which of over will referring call will reconciliation to forward-looking from measures materially that, detailed statements differ our SEC the posted this other affect the Also, The for found including release. description call, harbor earnings, the the been release XXXX, our our differ flow, companies. performance to I provision earnings Douglas can we comparability be statements have December results the certain in XXXX. to may These EBITDA statements items call included forward-looking I from at forward-looking performance materially of make may financial for net CEO, actual of Lindsay. see EPS that XX, the the harbor the be to attention that the forward-looking our non-GAAP presentation safe our end provision forward-looking, to statements. results related actual website. statements. our with safe of risk your the now with want Form periodic related which for our XX-K call filings will our for today's ended investor that please cause tables to to a are earnings adjusted financial free and risks On year subsequent certain content including for non-GAAP and non-GAAP

Douglas Lindsay

Good consolidated morning, your and time our Keith. for which report Aaron's interest are to company for U.S.A., us acquisition today Thanks, of joining first Company. results on Thank Today, in pleased since closed the April BrandsMart for everyone. we The you X.

the is new As quarter, strong this off BrandsMart revenues start result the by a we encouraged economic the faced quarter. of challenging the In are acquisition, second segment. to second a in a Aaron's environment. consolidated performance and the increased of business business

significant serve. available financial income and pressure demand our half have of food second In the business the the we in quarter these the result, for And financial the pressure share quarter on the on that quarter, progressively customers' housing expectations. of and XXXX necessities. for merchandise lowered expect basic the per additional As back Customer put renewing light now our company's leading new Aaron's is year trends, leasing Making revenues, lease rising, less customer than these agreements. high or outlook. to we lower coming below activity worsened of our and lower needed earnings inflation prices through a prior earnings income payment performance and cover With we as year. more gas, in

changing and We market expenses reduce light number actions conditions. optimize have taken a performance already to of in the of

support in and and Aaron our We store center. stores operating have staffing levels reduced expenses

confident X Despite to the year million environment, Aaron's repeatedly active Aaron that economic times more the of stores than proven has XXXX, it And corporate count remain by challenging them tough. and for to downturns, we of model have demand announced end. of the consolidate in additional plan have locations. We we with the when can reduced macroeconomic business. inventory to current to withstand who we Also, Since are be closure close purchases resiliency our align one customers, business on thanks office us of our the there our loyalty trends.

our communities with challenging environment. transform expertise in made we and leveraging five relationships that navigate years the investments value. service our to this to the We better our and strong us provide serve believe the are business greater over past deep Further, are Aaron's the we've to we customers allowing even

lease in us our economic and shop, of and our Meanwhile, customers of these and whether our store in we encouraged online. prefer where our the assess meet response channels by evolves. customer to in allows optimize growth to origination to our program e-commerce our We GenNext the Aaron example, enable portfolio beautiful rates channels our platforms remain lease approval continue they to decisioning GenNext tightened performance our and innovations the activity. continue a invest our We've will landscape as very declining to us payment lease the lease we decisioning trends, strategy, initiatives. For or performance already in monitor will to and high e-commerce store our

BrandsMart, believe with the to leading us Together market balance and customer position growth. for to our delivering continue our is base that expectations BrandsMart increasing to our appliances diversifying quarter, optimism of continue the through consumer and in a the exceeding future will additional in innovation electronics and serve. and invest sheet price about acquisition. This Aaron's and we the leader believe for enable also in creation value proposition which our liquidity, choice this a markets on and available the will focus new value will well second large we businesses opportunities performed in us retailer low segment internal We we and strong

President additional Aaron's financial like of the and Olsen operational I'd BrandsMart, provides Kelly our welcome to to Now, before Wall performance. performance on both discuss our Steve details

Steve Olsen

and to I've you to service, excited customer our and our I'm continued Thank to with enjoyed want members. several warm thank for team and also by last months team I begin a over extending working commitment members your on I all Woodhaven you, together. want and innovation the Aaron's, future marketplace. winning the Douglas. building across about focus in BrandsMart BrandsMart truly welcome of the

have efforts been Your outstanding.

Aaron's we The the Douglas in As in last on earnings volatile discussed the beginning was quarter the normalization. trend declined quarter. other demand in saw economic April. to anticipated Likewise, rates due second in quarter, in Customer renewal originally That And inflationary worsened and call, first the our the choppiness progressively as business beyond challenges through continued we customers. pressures mentioned, mid-May the quarter. second and lease faced in

pre-pandemic quarter, in levels operated through for above quarter in government's quarter the lease rates rate deterioration as began see renewal to was to XX.X% customer stimulus company performing stores, lease While compared renewal progress. of the May, early Aaron's our the second second XXXX. our we XX.X% aided In

an higher led merchandise customer GenNext continue the stores -- X.X%, a million, revenue store channel in Aaron's Aaron's note operated in lease will key our driver in second decline the lease channel remains a increase which a in company and for returns portfolio charge business. year higher business, to of ended e-commerce Aaron's higher momentum discuss in experienced of with charge offs, lease minutes. merchandise portfolio the positive The the few off $XXX.X with size Kelly see all for acquisition strategy. E-commerce quarter prior combined strong also We to a demand to and the lower we returns, lease customer We a size. a as On quarter. decrease compared

increase e-commerce prior continued XX.X% compared marketing online this the leading and offered XX.X% revenues, rates represent This quarter important in second have second aarons.com. product e-commerce quarter an We channel continues attracting XXXX. customers originations percentage in our of the Also, experience the a lease the conversion in These of in second shopping to quarter. of revenues. a our expand versus lease X% XXXX, up growth year our improve led from of increase to quarter, assortment the the a XXXX. lease total in to are as origination e-commerce represented lease in XX.X% increasing of digital enhance improving second second more on quarter revenues In total to quarter to the efforts strategies, and e-commerce

more This continues lease our second locations, operating bringing open last of year GenNext one opened our In than grow stores for total than higher our to more XX% to a meaningful revenues, in year. than of at GenNext legacy through experience in second we shifting strategy. model. rate average XXX continue quarter operated GenNext the XX the see performance quarter, our Now we stores. and GenNext of deliver than less company transformation up the now to quarter, In account strategy from our customer originations in-store X.X% to XX.X% financial which the stores,

to more strategy adding earning call, we remain GenNext in this to year. locations discussed look last we and this XX approximately forward As the important committed

awareness primarily each strong offers quarter, a new to BrandsMart revenues. BrandsMart report performance BrandsMart entire key of value-oriented business. e-commerce. for an and I that provided square acquisition Also, the XXX,XXX prices product salespeople, of wide we In appliances a service $XXX.X one in an second competitive across customer strong in leasing loyal quarter, BrandsMart BrandsMart we is the has base has is the the average appeal to that described delivery the by XX,XXX growth was brand our of Turning we implement have in established quarter, BrandsMart to revenue BrandsMart by and which double-digit last lease-to-own spectrum. solution. a serve, replaced stores in-house network. market launched pleased driven with of growth nearly This approximately to as second local XX higher in million retailer successfully synergies In assortment store third-party. solution previously lease-to-own the Each am delivered average feet. our size a and knowledgeable items the credit ticket,

excited are customer Our experience. about team improved customers which leasing, and and a BrandsMart faster members brings

portion has and growth the are in solution opportunity our this BrandsMart of believe potential business new small it excited future. today, represents While a about the we significant

BrandsMart the costs; like I over investing remain lease-to-own assortment new In Kelly. people, to call aarons.com; growth reduce our and in stores BrandsMart key product opportunities our capturing on grow adjacent With the include: to leverage expand and channel product would and solution, buying in addition These power that, our of the for the focused e-commerce open other technology combined the process hand BrandsMart synergies markets. following offered on we acquisition. company to to

Kelly Wall

Steve. you, Thank

second As filed XX-Q. we quarter detailed the in recently

stores segments compensation, and separation restructuring, XX includes and but are Brandsmartusa.com the not U.S.A. The are expense interest which segment segments: by to stores, company, related expenses, The retail consolidated acquisition Aaron's unallocated now burdened platform. equity-based we other and include, BrandsMart corporate platform, two furniture two BrandsMart the limited our business corporate includes not certain the operations. functions. the The BrandsMart. Business leasing BrandsMart company to operated addition aaron's.com Aaron's our business business reporting Aaron's segment are franchise on Woodhaven, operations, the In e-commerce and and manufacturing Aaron costs,

profit the of XXXX the with by million period. year the in The BrandsMart, Gross Consolidated For gross the offset margin all which in quarter, second was will with of align increase periods, at reportable acquisition, was was addition increase the due The presented prior total the $XXX.X million $XXX.X of lower compared of business. primarily year business. a million the decline XXXX, $XXX.X lower to the was we second an in which adjusted the discuss, the for I to the quarter revenues also of prior were quarter. results was Aaron's at have the revenues Aaron's operates segments. financial margin year profit primarily to was XX.X%. than lower million, acquisition business primarily year-over-year, revenues prior in included Gross which This BrandsMart due year-over-year the BrandsMart, Aaron's quarter to lower offset due lower $X.X not new by profit at

and for operating addition business compared at write-offs. related occupancy, expenses Adjusted EBITDA the at expenses was the Our cost million merchandise compared second than for million is other to spin as of excluding Aaron's other operating and partially in quarter and in million, Personnel acquisition increased primarily to of second which year, provision restructuring functions year quarter, BrandsMart by Aaron's related Total in XXXX compared prior lower costs same expense expenses. both compensation personnel due offset miscellaneous to unallocated the and within increase incentive lower corporate consolidated at increases operating and costs acquisition due BrandsMart. This expenses increased offset the of $X.X and period. This the cost second of with million higher handling for expenses, $XX.X the were prior in the quarter the other advertising business. the the result by to $XX.X the expense, XXXX, as primarily higher shipping in XXXXwas $XX.X the XXXX. included the Aaron's business, the in performance-based quarter, period of was partially lease

$XX partially cash offset of corporate tax of million. percentage flow last the credit At EBITDA facility the in Aaron's BrandsMart year. of and million compared was by balance to company EBITDA at to a expenditures liquidity were per XX% unallocated in compared current EBITDA end changes purchases and share basis, revenues, share, $X.XX, our year and $XXX.X earnings This of costs. benefit including XX. adjusted the $X.X and decline of with of diluted tax state earnings connection deferred in same decline in a Total X.X%, under As in due to million XXXX. and deferred of quarter, lower at On adjusted EBITDA in the acquisition. a primarily primarily lower higher business, decline includes addition working was capital was remeasurement was non-GAAP $X.XX assets availability quarter, year-over-year. the total merchandise. million, the adjusted per by liabilities offset per of the in was decrease $XXX.X generated EPS debt cash by was second quarter Free margin year's which due This with million a lease adjusted $X.XX of the quarter this total capital of June a revolving had $XX.X for the share diluted the BrandsMart non-GAAP income

cash purchased XXX,XXX and common quarterly stock. of a paid dividend shares we company's quarter, the the During

at of total the to discussed increase expenses business and personnel for to lease the partially a the to compared $X Aaron's a Aaron's to business, merchandise This was in compared compared earlier. charged in been write-offs was decline to year XX.X% activity the an revenues, offset charged lease as increase X.X% decrease period. the provision attribute to X%. expense expenses. revenues in of and were environment. off lower as quarter $XXX.X lease year the Turning lower million, off. Both an by average for the quarter. expenses The due million increase in customer At the X.X%, second lease net for higher the down Steve compared quarter prior business were by and year increased the other quarter lease for the revenues fees inflationary of segment. the XXXX, write-off provision in book period. was percentage X.X% payment Same-store have which quarter, which Operating the prior we were agreements merchandise prior primarily lower operating $XXX.X the of primarily the quarter to of to lease in million a frequency the revenues for current of due value the provision second high impacted was merchandise This of Higher that

lease compared In business the quarter in XXXX. by in revenues $XX write-off period million Aaron's with same was the increase the the for for XXXX, was adjusted second EBITDA in of lower the million, impacted the Additionally, $XX.X percentage quarter.

from was As of a in retail strong was normalization which total prior last the the year's expected were than same percentage second approximately last second believe lower sales $XXX.X of customer decline compared XX.X% demand EBITDA million, we a stimulus. quarter of At which the quarter year. of revenues, the due XXXX, year. in X% XX.X%, following primarily to is XXXX adjusted This to government quarter benefited BrandsMart,

excluding or inventory U.S.A. percentage adjustment given same-store a currently million for adjusted not will high release, quarter renewal the retail your a all reflects our XXXX, continue will which write-off been more portfolio who related fair to inflationary the acquisition EBITDA providing I XXXX second for was issued detail of operator, XX.X% Gross lease size, BrandsMart expectation updated value impact rates, for stores non-cash This expenses. than outlook full will the have call of to with current sales In sales. Yesterday, $XX.X other includes outlook. we million. provision the customer of earnings profit that assist company BrandsMart $XX.X opened our are the the demand, that adversely We XX-months. turn comp over quarter to was merchandise the With lower now environment lease questions. and that, our lease second

Operator

Our comes Instructions] Kyle, [Operator question first open. you. Thank of Kyle from now Jefferies. Joseph line is your

Kyle Joseph

us the a frequency Hey, good talked for are those on taking auto been finance, but I've questions you you changing? morning, of getting both of touched on guys. can how the lot my write-off kind Thanks for and give about you but side, it. questions. on a the the Kelly, -- severity, of sense in

Kelly Wall

Happy Yes. to Kyle.

the that, the majority Difficulty] was was quarter, that [account] of in X.X% [Technical So (ph) that. increased that and the of

bridge from year, understand I'm to this. year to you to actually beneficial So going it's to this last going you very be help

the So of seeing obviously write-offs QX. year, into as in because is we frequency, end for given well, in year, charge-offs continued book X.X% were so and at those The we're QX about higher net a reserve as how X.X% right? XXX reserving or increase well future as basis period the the well. the as is value, amount anticipated for the this towards We're rest that's increase that of points last the

three those it's So have which to led a increase. the are things, of combination -- year-over-year

Kyle Joseph

-- a difficult And in you macro That's you it's we forward quickly demand and with ’XX this you and demand saw of -- that? very was the and would do you any how pull of there catalyst environment, think for And some bit demand ‘XX in just of macro helpful. obviously, recognize of ball it. recovering? a would the it's stay then terms the environment, And see at on side, but Got out it kind but in like anticipate crystal of how kind stimulus home. question a

Douglas Lindsay

exactly ’XX lot there now Kyle, lot we're of was purchases of into a right. it's Douglas. ’XX, liquidity environment. and we're more and entering you're right folks I really mean, think the making had mean, money market, market in I retail On leases. in a unique and

opposed deterioration That said which business, has just be As credit focused customer that, the in and serves is I of comments, pay know, demand we seeing food, low and seen to the gas, the beyond mentioned primarily and and we've beyond progressively to liquidity we're his normalization. it's There BrandsMart publicized, more clear on you is no household, housing, spectrum, lower to doubt not prepared their payments. We've Aaron's want bills. demand normalization, which income customer to on deterioration in large said as in through business and BrandsMart, Aaron's worsened our where widely remarks payment activity in normalization but across customers struggling a also customer is pressure, Steve less items the for under the income and quarter. buy in

As we're QX say to a you then and going the the in to assuming that's in macro rate demand the our year. And June, what that that this have beyond in say, saw environment. are had through we five we as the consider the of mid-May over April. we season, quarter made the worsened adjust normalization. that of Encouragingly, outlook progressively demand recall renewal experiencing that choppiness resurgence well we now would then also in we continue look first end was to rates of utilizing of saw investments as beginning the would as lease we trend past trend our we volatile we've years tag similar to delayed a would rest been we customer earnings COVID, say that we for in call, forward, I would run

the are their in business our the and us. be put what those if tightening mention have by that. E-comm has didn't been But we strong into that these side e-commerce pressures portfolio of ability that lease of have managing, the demand I is pay, the by business also I a size an thing lease environment a in We off encouraged we've of environment centralized structure. and decisioning, pressure and but to we the quarter, quarter remiss, sales sizing that's inflation positive. Last year. XX% a on reflects back demand trends customer so the our on for is decisioning on and really XX% bit, coming our point going right we're to would first outlook impact for renewal and growth the tightening for is deal half that's been putting all grew I'd despite cost say in demand this setting success the the as

to We higher a have been we've on to cost purchasing customer. our that but historically, items able pass been than at cost

Our which taking cost forward right the quarter little we're of the that the margin average demand X% has customer increases, increases, into through cost dynamic pull has us they our ticket is now. taking, the impacting preserving writing been we've over portfolio so up been seeing customer our [indiscernible] in and unless liquidity with we're been but

Kyle Joseph

for me. it for taking Very my questions. helpful. That's Thanks

Operator

Thank you.

of question Haas of your next open. now Jason, comes line from America. Jason Our is Bank

Jason Haas

taking Hey, and thanks morning my questions. good for

need see we that morning. tightening the if first use I'm economic start not be quarters? positive to The of the get the an you're if to any you terms you, form curious was in -- above any when down good we could as causing with business typically terms which starting in if lease-to-own could downturn of -- people Aaron's more? coming think you'll into Are to all trade to that of that's lease-to-own. seeing people are also And pushing credit thoughts whether folks hey, in yet, inflation in into one any go seeing to curious

Douglas Lindsay

It's Jason, right to gauge it's Hey, now. Yes. tough Douglas.

on believe credit in will get keeping to the Should the and continue interest definitely for eye are rates rise market We an future. restricted to expand. it. We access lease-to-own

items. begun a before looking -- we would the we're very ground increases on for but normalized first we this pressure. said big in ears smaller external the And unique customer believe that ticket think we've or in tightening that in right to normalized see that environment, inflationary now, say to payments if moment have in happening of are we're I environment, any on of to We're is a would monitor continuing following to kind the But a we with have customer and that to down not secondly, marketplace. that rate see trading not all, interest have the a credit environment. is our and normal in clearly credit I data

ability internal of addition, if to have In in space, we customers. data look into higher the see new as our well composition seeing the as Aaron's entering business scores our we're our to credit via

we seen while carefully haven't So watching monitoring it, forward. we're and going

Jason Haas

Thanks. I try was know revenue. also -- you to, that guess, hear. just grow topic the follow-up, briefly it store to on about to strategy. a for you, then I EBITDA as the I a mentioned you following Good closure Douglas think spin-off And lower

curious, And and per playbook I'm one bit to still into we to alongside and little -- kind BrandsMart more we two year expect starting look I'm So that that? still also curious of store a opening next back thereafter? dust if off to year a then are that you're should

Douglas Lindsay

Sure.

Just markets serve bigger we we where of were had on to time articulated serve at number fewer the as spin, the we our that reduce strategy, recall a stores e-comm. same of strategy and the as stores now with going the and GenNext you

was back it our just think and markets and surge we as at demand didn’t pulled strength the time. was stores we last of prudent years, the had With over in stimulus-driven economy a the the two

strategy And closures comments about back revert has pace been half back the that the slower, the While closures second in merge store year. are store I noted the my beginning half of we in of in closed to our of this year. to

close closed efficient stores, important but will to getting the in expect it's be a note stores market. those We're We just to mergers. more

digital business can can store, and profitability platform e-comm have those cost structure our revenue we of a portfolio our with markets. platforms, we drive our and service benefit our reduce efficiently. those leases into in customers We the port of where And servicing recurring very another

way so will to market-by-market, many making have and store a of profitable We interacting an the merging believe an just assess business visits with that's us We efficient customers be payments store, into physically existing outside is more versus fewer customers the actually run encouraging. repositioning stores we'll where physical store. to

Importantly, frees us earnings will in terms at strategy time question. of the BrandsMart cash Speakers], Yes, the up flow take take I'll create and in capital drive the we of stronger let business. spin, and we said that. this I’ll working Steve Yes believe [Multiple the that help let Steve

Steve Olsen

is This morning. Good Yes. Steve.

research the next year. early positioning believe the the and both open we process, in BrandsMart the customer, market competitive a as in store strategy we're And As the year doing to now, on opening adjacent the we're in stand our one we two to on remarks, these markets that, store see growth we for a mentioned right as both hope prepared business. we still key that with say, and

Jason Haas

you. Thank Great.

Operator

Thank you, Jason.

from Truist your of question comes Securities. Our open. line next Ciccarelli Scot, Scot now is

Scot Ciccarelli

Good Ciccarelli. morning, Scot

for any what year? is you exit quarter. rate back idea And your half throughout rate deteriorate Can ended at So the the anticipating the but of was? you're guys the us renewal XX.X%, quarter that what give the

Kelly Wall

it's Scot. Yes, Hey, Kelly.

the in about be the So year for we're levels. right the our going through to we're basis parts and of of QX, half is lower anticipating early points seeing be year full-year, period, half kind in typically prior of, we're may basis as kind calls, we renewal recall that our to we've you back normal the back And -- XX% that. exited than the what outlined XXX XXX in XXX would what points about pre-pandemic than rates of QX the pre-pandemic, now of and are lower our a basis points between XX%

lower us a puts the quarter, for we you than a that rest the average the of but year? guide bit can So give for kind of of where

Scot Ciccarelli

much guys provide tightening some you're about how your however portfolio maybe, growth Kelly, approval regarding can then color of rate? you also impacting helpful. Very And think And process? terms just the you in

Douglas Lindsay

this tightening. the Scott, Hey, is talk I'll about Yes. Douglas.

vast amount the well. do their the we're think ever payment their customer now I -- of last predictive and in And or so months said outcomes that to six decisioning pay that and us, e-comm we're the stores As and score to to really aligned over slopes to Really they previously now size what on model through trying our to centralized majority lease course to we is of the We've both decisioning our channels. adapt is last over we our their we've communicated, think this model and ability environment. evolving XX-months our customers very adjusted pay. our we're there

expect lease our outlook. at second quarter tightening reflected about of of time, approval is they last be the that And lower year We in the than XXXX. our of X% decisioning this rates full-year end to at were

Scot Ciccarelli

it. Got

Okay. Thank you much, very guys.

Douglas Lindsay

Yes.

Kelly Wall

Scot. you, Thank

Operator

next [Operator Anthony of is from line open. now Capital Instructions] comes Anthony, your Chukumba Markets. Our Loop question

Anthony Chukumba

for Good morning. questions. taking Thanks my

question, the little macroeconomic given I I lease X% to merchandise it range? first guided historically still know merchandise that sort what we're rate bit unprecedented a X% right of that guidance of now? this, basically, updated Is on range. based implied? your First X% environment sort guess, sort I guess X% to rate for question higher my in write-off of, lease the is you’ve write-off XXXX, in is in

Kelly Wall

you Kelly. like said, It's a given Anthony. Hey, in Listen, unique Yes. now. right pretty situation think here we're I

what to going are we the for that provided is view to relative before. higher had Our be full-year we

of X% as between lease right X% lease thinking for is percentage current now the a the and revenue. that's full-year that and Our write-offs XXXX,

Anthony Chukumba

question then you stores? XX-Q know business this I for That's if how numbers for Got and Okay. operating just in I the franchise store don't real housekeeping is it. Aaron's apologize just it. Can and I missed one give company quick just helpful. the And

Douglas Lindsay

X,XXX our franchise are the stores stores at Douglas the Yes, end Anthony. of is quarter. and XXX here. four It’s stores Company-owned stores

Anthony Chukumba

Thank it. you so Got much.

Kelly Wall

you. You’re Thank welcome.

Douglas Lindsay

Thank you.

Operator

comes question open. of next now Our Instructions] Griffin James. your [Operator Bobby, from line Bobby Raymond is

Bobby Griffin

Yes. anything wide the has this like Good it GMV one? space morning, just my on that? through end able we my of the cycles the terms of everybody. level than question Why performing is space? gone why of control itself, you But one's of during finding or think to space high kind or of the exactly market really manage differently Thanks more it's for this cycles. do kind a and the I In side variety questions. to but did the write-offs guess rent-to-own tougher business your taking economic prior think first through being

Kelly Wall

This interesting. seeing period we've market of experienced the past. in unique is we're it's and Bobby, Yes, time, conditions a different

now time. expansion unit customer. lot had with on much which to that when point and If Credit inflation we would did like the we is also seeing is XXXX, crisis higher our able during inflation time XXXX time decreased would a say, with the but then market expanded, and conditions, analytics points lot right pull we've tightening higher you tightening, a in and now. This recession scores recent expect. deal the at and we've back that today I Unemployment in to then be would expanded got data forward going but back look to the during a better also that that back I is certainly demand on this, that credit not we've most the what different? proceed be got was What's increase decades touch lot of it's market our like seen the did so as we’re been credit the different. revenue say would since to during Same-store past, much period. due financial better macroeconomic

from challenge. all full-year and to little is we'll forward. reflected in other We've dynamics different their at more you're Shopping as our our assess got hearing move we've retailer the So happening continue of same to the of said, pull on much guidance or not. time. a lot as as customer, some we pay we And as ability that's and pressure those forward putting things a bit

Bobby Griffin

Okay. switch pretty that. around then mean, I And to guess as kind to what's was the And in X% a on on business? that, that the can of year-over-year held down leas-to-own I single-digits. I basis feel going the know, or is Was stable up throughout other lastly you business of over as volatile we Appreciate BrandsMart, mid quarter-over-quarter. a quarter? good you side that mentioned that trend isn't think get

Steve Olsen

glad Hey, Steve. Bobby, it's to answer that. I'll be

up X. June, to it recent where to even July the kind up both and in down I the hold trends the improving on leading quarter, some quarter through the we sales, holiday would pretty you throughout did in break much If saw point of promotions nice say May

business, QX hold. the e-commerce saw trends the the appliances team, and strong So throughout we're can we’re the about But excited that the where management optimistic about business in excited future promising. we think And trends. we're we the growth was very where take about we

Bobby Griffin

you. Thank

Douglas Lindsay

growth opportunities say about Bobby. BrandsMart, encouraged value opportunities. we're very and Yes, the creation I'd

encouraging market Just on a long now. market right at through is operators, situation we're in who tenured one level with through worked many and our we disruptions. word last unique a for been have me What's have have cycles customers local Aaron's,

BrandsMart, model time. have encouraging. allows channels The our we growing value business business the have. encouraged growth in disruptions. our benefit channels are managing and service to believe in We're very is about we're short-term we that and revenue like in And our encouraged that over right the over continue current long-term like and very, now our We're and time have very the current of recognize market customers and the these our we managing GenNext our to e-commerce retail through that expanding proposition terms strategy revenue and for us unlike our outlook other stores the really

Bobby Griffin

half. Best detail. luck the Appreciate the here in of second

Douglas Lindsay

Thanks, Bobby.

Operator

Thank you, Bobby.

is We have Markets. now of open. Anthony, a your Loop from Chukumba follow-up Capital question line Anthony

Anthony Chukumba

to me here. much double allowing dip Thank for you so

assuming obviously, to in your Just I'm to to a just terms down, real but cash the brought flow quick wanted credit benefit tightening, anything see wanted increased else or that question, but that's from sort free working guidance confirm of Thanks. you change? just if speak could of guidance. you that the capital there's you

Douglas Lindsay

Anthony. Yes,

right, expectations as half the demand, half year. inventory expect, the course correct, lowering go down of the that we of managing We're for back we those as of you'd lease brought and purchases very our our the also, You're as back year. tightly through merchandise kind of, for the

Anthony Chukumba

Thank it. Got you.

Operator

questions. your At for you Thank this questions. time, further we have no

hand I'll any Lindsay over for Mr. remarks. back So closing to

Douglas Lindsay

we're you today, operator, and you, us thank challenging for economic Thank although navigating environment. joining

on being remain encouraged growth. and for strategies and of in innovating forward We're and with soon. on our the our Our exceptional growth look service and initiatives we you those we by customers performance team business. to delivering today to future us our invest continue again Thank to with you members value drive strong focused to speaking

Operator

this concludes call. Ladies gentlemen, today's and conference

may your You lines. now disconnect

The Aaron's Company, Inc. (AAN) 26 Jul 222022 Q2 Earnings call transcript