Aaron's, Inc. (NYSE:AAN) Q3 2017 Earnings Conference Call Transcript
Oct 27, 2017 • 08:30 am ET
Good morning. Welcome to the Aaron's, Inc. Third Quarter 2017 Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions) After today's presentation, there will be an opportunity to ask questions. (Operator Instructions) Please note this event is being recorded. Participating this morning are John Robinson, Aaron's Inc. President and CEO; Douglas Lindsay, President of Aaron's Sales and Lease Ownership; Steve Michaels, Aaron's Inc. CFO and President of Strategic Operations; and Ryan Woodley, CEO of Progressive Leasing.
Now, I would like to introduce Kelly Wall, VP of Finance, IR & Treasury. Your may proceed.
Thank you, and good morning, everyone. Welcome to our conference call to discuss Aaron's third quarter results which we released today. All related material, including Form 8-K with the Q3 earnings release, are available on the Company's IR website, investor.aarons.com, and this webcast will be archived for replay there as well.
Before the results are discussed, I'll remind investors about the Safe Harbor statement. (Forward-Looking Cautionary Statements).
I will now turn the call over to Aaron's CEO, John Robinson.
Thanks, Kelly. Thank you for joining us this morning. I'm proud of our overall performance in the third quarter. Hurricanes Irma and Harvey presented extraordinary challenges for our teams, given their scope and the importance of Florida and Texas to both the Aaron's business and progressive leasing. We mobilized the entire organization to provide crucial support to customers, communities and associates. In affected areas, we temporarily suspended our collection activities, and in many cases, replaced damage products in our customers' homes.
We sent more than 10,000 cases of water to areas in need and raised approximately $200,000 from our associates and the company to support local charities and our employees impacted by the storm. Despite the significant distraction, we executed our business effectively. Total revenues for the quarter increased 9%, and we're on track to deliver our full year outlook, excluding the impact of the hurricanes. Third quarter top-line performance was driven by strong momentum at Progressive Leasing and positive trends in (technical difficulty). Progressive achieved a 36% gain in invoice volume with increases in both new doors and volume per existing door.
That level of momentum in the business' size is a test to our outstanding team and the significant market opportunity. The lease portfolio is performing in line with our expectations, and the current pipeline and door productivity underscore our confidence in Progressive's potential to continue to deliver significant growth. I'm also excited by the Aaron's Business. We're investing in our omnichannel platform to drive revenues and operating efficiency. The work is in progress and we're seeing encouraging results, particularly in some of our leading indicators. The third quarter benefited from a sequential and year-over-year improvement in lease margin, continued progress on write-offs and better-than-expected top-line trends.
We're excited about the progress we're making and believe the fourth quarter can build on this momentum. Our balance sheet is in great shape with $126 million in cash in the quarter and net debt to capitalization