Aaron's Company Inc (AAN) 2023 Q2 法說會逐字稿

Ladies and gentlemen, welcome to The Aaron's Company Inc. Second Quarter 2023 Earnings Conference Call. My name is Glenn, and I'll be the operator for today's call. (Operator Instructions)

女士們、先生們，歡迎參加 The Aaron's Company Inc. 2023 年第二季度收益電話會議。我叫格倫，我是今天電話的接線員。 （操作員說明）

I will now hand you over to your host, [Mark Levy], VP, Finance and Investor Relations, to begin. Mark, please go ahead.

現在我將把您交給主持人，財務和投資者關係副總裁 [Mark Levy]，開始。馬克，請繼續。

Thank you. Good morning, everyone. Welcome to our second quarter 2023 earnings conference call.

謝謝。大家，早安。歡迎參加我們的 2023 年第二季度收益電話會議。

Joining me today are Aaron's Chief Executive Officer, Douglas Lindsay; President, Steve Olsen; and Chief Financial Officer, Kelly Wall. After our prepared remarks, we will open the call for questions.

今天加入我的是 Aaron 的首席執行官 Douglas Lindsay；總裁史蒂夫·奧爾森；和首席財務官凱利·沃爾。在我們準備好發言後，我們將開始提問。

Yesterday, after the market closed, we posted our earnings release on the Investor Relations section of our website at investor.aarons.com. We also posted a slide presentation that provides additional information about our second quarter results and full year 2023 outlook.

昨天，市場收盤後，我們在 Investor.aarons.com 網站的投資者關係部分發布了收益報告。我們還發布了幻燈片演示，提供有關我們第二季度業績和 2023 年全年展望的更多信息。

During today's call, certain statements we make may be forward looking, including those related to our outlook for this year. For more information, including important cautionary notes about these forward-looking statements, please refer to the safe harbor provision that can be found at the end of the earnings release. The safe harbor provision identifies risks that may cause actual results to differ materially from the content of our forward-looking statements. Also, please see our Form 10-K for the year ended December 31, 2022, and other filings with the SEC for a description of the risks related to our business that may cause actual results to differ materially from our forward-looking statements.

在今天的電話會議中，我們做出的某些聲明可能具有前瞻性，包括與我們今年的前景相關的聲明。欲了解更多信息，包括有關這些前瞻性陳述的重要注意事項，請參閱收益發布末尾的安全港條款。安全港條款確定了可能導致實際結果與我們前瞻性陳述的內容存在重大差異的風險。此外，請參閱我們截至2022 年12 月31 日的年度10-K 表格以及向SEC 提交的其他文件，了解與我們業務相關的風險描述，這些風險可能導致實際結果與我們的前瞻性陳述存在重大差異。

On today's call, in the release and in the supplemental investor presentation, we refer to certain non-GAAP financial measures, including EBITDA and adjusted EBITDA, non-GAAP net earnings, non-GAAP EPS, adjusted free cash flow and net debt, which have been adjusted for certain items which may affect the comparability of our performance with other companies. These non-GAAP measures are detailed in the reconciliation tables included in our earnings release and the supplemental investor presentation posted on our website.

在今天的電話會議、新聞稿和補充投資者介紹中，我們提到了某些非GAAP 財務指標，包括EBITDA 和調整後EBITDA、非GAAP 淨利潤、非GAAP 每股收益、調整後自由現金流和淨債務，其中對某些可能影響我們業績與其他公司業績可比性的項目進行了調整。這些非公認會計原則措施在我們的收益發布和我們網站上發布的補充投資者演示文稿中包含的調節表中有詳細說明。

With that, I will now turn the call over to our CEO, Douglas Lindsay.

現在，我將把電話轉給我們的首席執行官道格拉斯·林賽 (Douglas Lindsay)。

Thanks, Mark. Good morning, everyone. Thank you for joining us today and for your interest in The Aaron's Company.

謝謝，馬克。大家，早安。感謝您今天加入我們並感謝您對亞倫公司的興趣。

I'm pleased to report that we delivered consolidated company earnings for the second quarter that were ahead of internal expectations, driven in part by our ongoing focus on cost controls. We also benefited from a healthier lease portfolio resulting from optimization of our lease decisioning model in prior quarters. The recurring revenue nature of our Aaron's business and its strong cash flow dynamics continue to be an advantage. During the quarter, we generated $53 million in cash flow from operations and improved the strength of our balance sheet by reducing net debt by over $30 million. Over the last 4 quarters, we have cut our net debt nearly in half while continuing to invest in our strategic growth initiatives.

我很高興地報告，我們第二季度的綜合公司收益超出了內部預期，部分原因是我們持續關注成本控制。我們還受益於前幾個季度租賃決策模型優化帶來的更健康的租賃組合。我們亞倫業務的經常性收入性質及其強大的現金流動力仍然是一個優勢。本季度，我們通過運營產生了 5300 萬美元的現金流，並通過減少超過 3000 萬美元的淨債務來改善我們的資產負債表實力。在過去的四個季度中，我們已將淨債務削減了近一半，同時繼續投資於我們的戰略增長計劃。

Now turning to the business segments. In the Aaron's business, I'm pleased to report that we ended the quarter with a larger-than-expected lease portfolio size. We've also made great progress on our market optimization initiatives by adding more GenNext and hub and showroom stores. We are executing well on the cost reduction initiatives that we previously announced. And our lease decisioning enhancements continue to improve portfolio performance. These items contributed significantly to our strong bottom line performance in the second quarter, offsetting continued challenging customer demand trends.

現在轉向業務領域。在亞倫的業務中，我很高興地報告，本季度末我們的租賃投資組合規模超出了預期。通過增加更多 GenNext 以及中心和陳列室商店，我們在市場優化計劃方面也取得了巨大進展。我們在之前宣布的成本削減舉措上執行得很好。我們的租賃決策增強功能繼續提高投資組合績效。這些項目為我們第二季度強勁的盈利業績做出了重大貢獻，抵消了持續充滿挑戰的客戶需求趨勢。

As we look to the back half of the year, we expect these demand trends to persist, but we expect to see sequential improvements as we begin to lap our lease decisioning cuts made in the back half of last year.

展望今年下半年，我們預計這些需求趨勢將持續存在，但隨著我們開始完成去年下半年的租賃決策削減，我們預計會出現連續改善。

Now turning to BrandsMart. Macroeconomic factors continue to impact our customers' retail purchasing decisions at BrandsMart to a greater extent than in the Aaron's business. Meanwhile, we are focused on managing profitability through enhanced cost controls and strategic procurement and pricing actions. We recently celebrated our 1-year anniversary of the BrandsMart acquisition. We remain confident in BrandsMart's compelling value proposition and our long-term strategic growth opportunities, including expanding into new markets and growing our e-commerce channel.

現在轉向 BrandsMart。宏觀經濟因素繼續對 BrandsMart 客戶的零售購買決策產生比 Aaron 業務更大的影響。與此同時，我們專注於通過加強成本控制以及戰略採購和定價行動來管理盈利能力。我們最近慶祝了收購 BrandsMart 一周年。我們對 BrandsMart 引人注目的價值主張和我們的長期戰略增長機會仍然充滿信心，包括拓展新市場和發展我們的電子商務渠道。

As we discussed, the customer demand environment remains challenging in both business segments. This is reflected in the updated outlook we provided yesterday in our earnings release. We lowered our consolidated revenues for the year, but maintained our adjusted EBITDA and non-GAAP EPS outlook. We have also increased our adjusted free cash flow outlook for the year. As we look ahead, we remain focused on optimizing profitability in both businesses, and we continue to make progress on the execution of our multiyear strategic plan. We are confident that the investments we are making will continue to enhance our distinct competitive advantages and allows us to increase market share at both Aaron's and BrandsMart.

正如我們所討論的，這兩個業務領域的客戶需求環境仍然充滿挑戰。這反映在我們昨天在財報發布中提供的最新展望中。我們降低了今年的合併收入，但維持了調整後的 EBITDA 和非 GAAP 每股收益預期。我們還上調了今年調整後的自由現金流前景。展望未來，我們仍然專注於優化兩項業務的盈利能力，並繼續在執行多年戰略計劃方面取得進展。我們相信，我們正在進行的投資將繼續增強我們獨特的競爭優勢，並使我們能夠增加 Aaron's 和 BrandsMart 的市場份額。

Before I turn the call over to Steve, I want to let you know that we've posted new videos on our investor website that showcase both our Aaron's GenNext and BrandsMart stores. I encourage you to watch these videos. Our stores have a unique retail format, a broad product assortment and an enhanced in-store shopping experience. We believe our Aaron's and BrandsMart stores provide the most compelling customer value proposition in the markets we serve.

在將電話轉給 Steve 之前，我想讓您知道，我們已在投資者網站上發布了新視頻，展示了我們的 Aaron's GenNext 和 BrandsMart 商店。我鼓勵您觀看這些視頻。我們的商店擁有獨特的零售模式、廣泛的產品種類和增強的店內購物體驗。我們相信，我們的 Aaron's 和 BrandsMart 商店在我們服務的市場中提供了最引人注目的客戶價值主張。

Now I'll turn the call over to Steve.

現在我將把電話轉給史蒂夫。

Thanks, Douglas, and good morning, everyone.

謝謝，道格拉斯，大家早上好。

The Aaron's business delivered second quarter earnings ahead of our internal expectations. As Doug has mentioned, we executed well on our cost reduction initiatives, which more than offset continued challenges in customer demand. Lease merchandise deliveries were down approximately 10% year-over-year. This was largely due to fewer lease applications in the quarter, actions we took to tighten lease decisioning in prior quarters and approximately 4% fewer company-operated stores as compared to the beginning of the prior year quarter. Our lease portfolio size ended the quarter with a value of $119.6 million. This was 8.6% lower than the prior year quarter, but larger than we expected.

亞倫業務第二季度的盈利超出了我們的內部預期。正如道格所提到的，我們在成本削減計劃方面執行得很好，這足以抵消客戶需求的持續挑戰。租賃商品交付量同比下降約 10%。這主要是由於本季度的租賃申請減少、我們在前幾個季度採取了收緊租賃決策的措施以及公司經營的商店比上一季度初減少了約 4%。本季度末，我們的租賃投資組合規模價值為 1.196 億美元。這比去年同期低 8.6%，但高於我們的預期。

Now moving to our key lease renewal metrics. The lease renewal rate for the quarter was 88.2% for our company-operated Aaron stores. This rate was down 30 basis points year-over-year, but in line with pre-pandemic averages for the second quarter. Our 32-plus day nonrenewal rate was 2.5% at the end of the second quarter. This rate increased 10 basis points year-over-year and reflects a sequential increase of 90 basis points from Q1 of this year, primarily due to normal seasonal trends. We continue to be pleased with improvement in our write-offs. The provision for lease merchandise write-offs, as a percentage of lease revenues, was 5.4% for the second quarter. This reflects a 30 basis point improvement year-over-year.

現在轉向我們的關鍵租約續約指標。本季度我們公司經營的亞倫店的租約續租率為 88.2%。該比率同比下降 30 個基點，但與第二季度大流行前的平均水平一致。截至第二季度末，我們的 32 天以上非續訂率為 2.5%。該比率同比增長 10 個基點，與今年第一季度相比環比增長 90 個基點，這主要是由於正常的季節性趨勢。我們對沖銷的改善繼續感到高興。第二季度租賃商品沖銷撥備佔租賃收入的百分比為 5.4%。這反映了同比改善 30 個基點。

Now let's talk about our important strategic growth initiatives for the Aaron's business. Our GenNext store strategy continues to deliver meaningful financial performance through the transformation of our in-store customer experience and operating model. In the first half of the year, we opened 19 GenNext stores, bringing our total to 230 company-operated GenNext storage. At the end of the quarter, these stores accounted for approximately 29% of lease revenues in retail sales. That compares to just over 17% in the prior year quarter. Lease originations in GenNext stores opened less than 1 year continue to grow at a rate of more than 20 percentage points higher than our legacy store average. Our GenNext stores have stronger revenue performance than our traditional stores, and we look forward to opening new GenNext stores in the future.

現在讓我們談談我們對亞倫業務的重要戰略增長舉措。我們的 GenNext 商店戰略通過店內客戶體驗和運營模式的轉變，繼續提供有意義的財務業績。上半年，我們開設了 19 家 GenNext 商店，使公司自營 GenNext 存儲總數達到 230 家。截至本季度末，這些商店約佔零售額租賃收入的 29%。相比之下，去年同期這一比例略高於 17%。開業不到 1 年的 GenNext 商店的租賃起始量繼續以比我們傳統商店平均水平高出 20 個百分點以上的速度增長。我們的 GenNext 商店比我們的傳統商店有更強的收入表現，我們期待未來開設新的 GenNext 商店。

In addition, we continue to execute our new hub and showroom program. So far this year, we have converted 72 showrooms, bringing the total number of converted locations to 101 since we launched the program last year.

此外，我們繼續執行新的中心和陳列室計劃。今年到目前為止，我們已經改造了 72 個陳列室，使自去年啟動該計劃以來改造的地點總數達到 101 個。

Now turning to the Aaron's e-commerce channel. We continue to focus on improving our digital marketing strategies, enhancing the online shopping experience and expanding the assortment with over 10,000 products for aarons.com. In the quarter, revenues generated from leases initiated on aarons.com increased 5.5% year-over-year and now represents 17.9% of total lease revenues as compared to 15.4% in the prior year quarter. We are also pleased that we experienced a year-over-year increase in both the volume of lease applications completed on aarons.com and the conversion of these applications. However, recurring revenue written into the portfolio from e-commerce decreased 10.7% compared to the prior year quarter. This decrease was the result of tighter lease decisioning in prior quarters and lower average ticket.

現在轉向阿龍的電商渠道。我們繼續專注於改進我們的數字營銷策略，增強在線購物體驗，並為 aarons.com 擴大 10,000 多種產品的品種。本季度，aarons.com 上發起的租賃產生的收入同比增長 5.5%，目前佔總租賃收入的 17.9%，而去年同期為 15.4%。我們還很高興看到 aarons.com 上完成的租賃申請數量和這些申請的轉換量均同比增長。然而，與去年同期相比，電子商務寫入投資組合的經常性收入下降了 10.7%。這一下降是前幾個季度租賃決策收緊和平均票價下降的結果。

During the quarter, we also launched a weekly payment option on aarons.com. As a reminder, we rolled out weekly payments in stores in Q3 of last year. We are pleased that we can now offer our customers the flexibility to choose a low weekly payment option wherever they prefer to shop.

本季度，我們還在 aarons.com 上推出了每週付款選項。提醒一下，我們在去年第三季度在商店推出了每週付款功能。我們很高興現在可以為客戶提供靈活的選擇，無論他們喜歡在哪裡購物，都可以選擇較低的每週付款選項。

Now turning to BrandsMart. As Douglas mentioned, we recently celebrated our 1-year anniversary of operating the brand or business. I'm proud of our team as we work to achieve our synergies and implement our strategic initiatives to drive future growth. Starting this quarter, we will be reporting a comparable sales metric, which reflects sales from stores open for the last 15 months. Please see our 10-Q for a more detailed definition.

現在轉向 BrandsMart。正如道格拉斯提到的，我們最近慶祝了經營該品牌或業務一周年。我為我們的團隊感到自豪，因為我們致力於實現協同效應並實施我們的戰略舉措以推動未來的增長。從本季度開始，我們將報告可比較的銷售指標，該指標反映了過去 15 個月內開業的商店的銷售額。請參閱我們的 10-Q 了解更詳細的定義。

Comparable sales for the second quarter were down 20.9% as compared to the prior year quarter. This is a result of ongoing weaker customer traffic and customer trade down to lower-priced products across our major categories. Throughout the quarter, comparable sales improved, especially during key promotional periods of Memorial Day and July 4.

第二季度的可比銷售額與去年同期相比下降了 20.9%。這是由於客戶流量持續疲軟以及客戶轉而購買我們主要類別的低價產品的結果。整個季度，可比銷售額有所改善，特別是在陣亡將士紀念日和 7 月 4 日的關鍵促銷期間。

As we seek to attract new brands to our customers, we continue to invest in our e-commerce channel and digital marketing strategies. Consistent with overall sales performance, we experienced pressure in the e-commerce channel. E-commerce product sales represented 8.1% of total product sales, down from 9.0% in the prior year quarter. Despite the demand challenges, we remain focused on optimizing the profitability of the business.

當我們尋求為客戶吸引新品牌時，我們繼續投資於我們的電子商務渠道和數字營銷策略。與整體銷售業績一致，我們在電子商務渠道中遇到了壓力。電子商務產品銷售額佔產品總銷售額的 8.1%，低於去年同期的 9.0%。儘管面臨需求挑戰，我們仍然專注於優化業務盈利能力。

For the second quarter, our product gross margin improved by approximately 50 basis points as compared to the prior year quarter. This was a result of direct procurement savings and strategic pricing actions.

第二季度，我們的產品毛利率比去年同期提高了約 50 個基點。這是直接採購節省和戰略定價行動的結果。

Finally, I'm excited to report that we are on track to open our first new BrandsMart store in Augusta, Georgia in Q4. We are confident that our brand and customer value proposition will resonate in this new market.

最後，我很高興地向大家報告，我們有望於第四季度在佐治亞州奧古斯塔開設第一家新的 BrandsMart 商店。我們相信我們的品牌和客戶價值主張將在這個新市場中引起共鳴。

Now I'll turn the call over to Kelly to provide further details on our financial performance.

現在我將把電話轉給凱利，以提供有關我們財務業績的更多詳細信息。

Thanks, Steve.

謝謝，史蒂夫。

We filed our Form 10-Q, earnings release and investor presentation yesterday after the market closed, and these documents can be found on our Investor Relations website. Please refer to these documents for additional detail regarding our financial performance and outlook for the consolidated company at the 2 business segments. Also, unless stated otherwise, any comparisons I make to prior periods will be on a year-over-year basis.

昨天收市後，我們提交了 10-Q 表格、收益報告和投資者介紹，這些文件可以在我們的投資者關係網站上找到。請參閱這些文件，了解有關我們合併公司兩個業務部門的財務業績和前景的更多詳細信息。此外，除非另有說明，我與前期的任何比較都將是逐年比較。

Consolidated revenues for the second quarter of 2023 were $530.4 million compared with $610.4 million. This year-over-year decrease is primarily due to lower lease revenues and fees and retail sales at the Aaron's business and lower retail sales at BrandsMart. Consolidated adjusted EBITDA was $42.4 million compared with $51.2 million. This year-over-year decrease is primarily due to the lower revenues at both business segments, partially offset by lower personnel costs and other operating costs. In addition, as Steve mentioned, write-offs were lower at the Aaron's business.

2023 年第二季度的合併收入為 5.304 億美元，而去年同期為 6.104 億美元。這一同比下降主要是由於 Aaron's 業務的租賃收入和費用以及零售額下降以及 BrandsMart 的零售額下降。合併調整後 EBITDA 為 4240 萬美元，去年同期為 5120 萬美元。這一同比下降主要是由於兩個業務部門的收入下降，但部分被人員成本和其他運營成本的下降所抵消。此外，正如史蒂夫提到的，亞倫公司的沖銷較低。

As a percentage of total revenues, adjusted EBITDA was 8% compared to 8.4%. On a non-GAAP basis, diluted earnings per share were $0.39 compared to $0.79. Despite the lower adjusted EBITDA in the quarter, we were very pleased with our adjusted free cash flow. It was $36 million, an increase of over $30 million. This increase was driven by higher cash provided by operations as we manage merchandise inventory levels at both businesses to reflect the current demand environment. Adjusted free cash flow also benefited from improvements to working capital efficiency and lower capital expenditures.

調整後 EBITDA 佔總收入的比例為 8%，而上年同期為 8.4%。按非 GAAP 計算，稀釋後每股收益為 0.39 美元，而每股收益為 0.79 美元。儘管本季度調整後的 EBITDA 較低，但我們對調整後的自由現金流感到非常滿意。為 3600 萬美元，增加了超過 3000 萬美元。這一增長是由於我們管理兩個業務的商品庫存水平以反映當前的需求環境時，運營提供的現金增加所致。調整後的自由現金流還受益於營運資本效率的提高和資本支出的降低。

During the quarter, we continued to return capital to shareholders, declaring $3.9 million in dividends and purchasing 66,000 shares of the company's common stock. In addition, we ended the second quarter with $38.4 million of cash and $186.1 million of debt. Our net debt balance at the end of the quarter was $147.7 million, a $30.2 million reduction from the end of Q1 2023. Since the end of the second quarter of last year, we have reduced our net debt by over $130 million. As a result, our net debt to adjusted EBITDA leverage ratio ended the quarter at less than 1x.

本季度，我們繼續向股東返還資本，宣布派發 390 萬美元股息，併購買了 66,000 股公司普通股。此外，第二季度結束時，我們有 3840 萬美元的現金和 1.861 億美元的債務。本季度末我們的淨債務餘額為 1.477 億美元，比 2023 年第一季度末減少了 3020 萬美元。自去年第二季度末以來，我們的淨債務減少了超過 1.3 億美元。因此，本季度末我們的淨債務與調整後 EBITDA 槓桿比率低於 1 倍。

Turning to our updated outlook. In the second quarter earnings release, we provided an update to our full year 2023 outlook. This updated outlook reflects our expectation that total revenues for the consolidated company will be between $2.12 billion and $2.22 billion. We have lowered revenues to reflect our consolidated results from the first half of 2022 and to also reflect expected lower product sales at BrandsMart in the back half of the year as compared to our prior outlook. We have maintained our outlook for adjusted EBITDA and non-GAAP EPS for the consolidated company. We've also maintained our adjusted EBITDA at both business segments as we continue to invest in our growth and cost efficiency initiatives. In addition, we currently expect that earnings in the second half of the year will be weighted more heavily in the fourth quarter. This is in part due to additional investments in marketing and other initiatives designed to further drive new lease origination activity in the Aaron's business segment. And finally, we have increased our adjusted free cash flow outlook. This increase reflects our strong cash flow in the first half of the year and continued inventory and working capital efficiency improvements in the last 2 quarters of the year.

轉向我們最新的展望。在第二季度財報中，我們更新了 2023 年全年展望。這一更新的展望反映了我們對合併後公司總收入將在 21.2 億美元至 22.2 億美元之間的預期。我們下調了收入，以反映 2022 年上半年的綜合業績，也反映了 BrandsMart 下半年產品銷量預計低於我們之前的預期。我們維持對合併後公司調整後 EBITDA 和非 GAAP 每股收益的展望。隨著我們繼續投資於增長和成本效率計劃，我們還維持了兩個業務部門的調整後 EBITDA。此外，我們目前預計下半年的盈利將在第四季度得到更大的權重。這在一定程度上是由於對營銷和其他旨在進一步推動亞倫業務部門新租賃發起活動的舉措的額外投資。最後，我們提高了調整後的自由現金流前景。這一增長反映了我們上半年強勁的現金流以及今年最後兩個季度庫存和營運資金效率的持續改善。

And with that, I will now turn the call over to the operator for Q&A.

現在，我將把電話轉給接線員進行問答。

(Operator Instructions) We have our first question comes from Kyle Joseph from Jefferies.

（操作員說明）我們的第一個問題來自 Jefferies 的 Kyle Joseph。

Just wanted to get a sense for sort of the consumer behavior during the quarter. I think last quarter, you guys highlighted that there were fewer early buyouts and that benefited margins. Despite that, you saw a stable credit. Obviously, we saw a stable credit continue this quarter. Can you give us a sense for what buyout trends were and expectations for the rest of the year. Can you give us a sense for where you think margins will go on the Aaron's business?

只是想了解本季度的消費者行為。我認為上個季度，你們強調了早期收購的數量減少了，這有利於利潤率。儘管如此，您還是看到了穩定的信用。顯然，我們看到本季度信貸繼續保持穩定。您能否讓我們了解一下收購趨勢以及對今年剩餘時間的預期。您能否告訴我們您認為亞倫業務的利潤將在哪裡？

Yes, Kyle. I'll start.

是的，凱爾。我開始吧。

I mean, demand -- I would say demand trends, as you noted from our call, have been challenging. We saw that in the quarter that's down 10% at Aaron's and down 20% at BrandsMart. I think when you look within the Aaron's business, that 10% is really a real, like negative 5% within that negative 10% is about -- half is real demand, half is decisioning and closed stores. And so what we're really encouraged about is the lease-to-own business is really holding up better than retail, I would say. And I think that's because of the payment price points at which our customers are shopping. We're not seeing as much trade down in the least in business as we are in retail, and Steve can talk a little bit more about that.

我的意思是，需求——我想說，正如您在我們的電話會議中指出的那樣，需求趨勢一直充滿挑戰。我們看到，本季度 Aaron's 下降了 10%，BrandsMart 下降了 20%。我認為，當你審視亞倫的業務時，這 10% 確實是真實的，就像負 10% 中的負 5% 一樣——一半是實際需求，一半是決策和關閉商店。因此，我想說，我們真正感到鼓舞的是，先租后買業務確實比零售業務表現得更好。我認為這是因為我們的客戶購物時的支付價格點。至少在商業領域，我們並沒有看到像零售業那樣的貿易下降，史蒂夫可以多談談這一點。

But the customer continues to adjust to this inflationary environment. early buyouts were lower in the first quarter, and they continue to be slightly lower in the second quarter. But as you know, the second quarter is not a huge early buyout quarter.

但客戶仍在繼續適應這種通脹環境。第一季度早期買斷較低，第二季度繼續小幅下降。但如您所知，第二季度並不是一個大規模的早期收購季度。

I think generally, in terms of the consumer, the consumer has remained resilient, and I think is acclimating to this challenging economic environment. If you look at our renewal rate, the renewal rate was pretty strong relative to pre-pandemic levels coming in right what we would expect in Q2 for pre-pandemic. And importantly, we really haven't seen any sign of a trade down yet. We are seeing a slightly higher quality customer coming into Aaron's, but we have not detected either through our BrandsMart waterfall or through our data at Aaron's, a significant trade down. We still continue to believe if that happens, it will benefit us.

我認為總的來說，就消費者而言，消費者仍然保持彈性，並且正在適應這種充滿挑戰的經濟環境。如果你看一下我們的續訂率，就會發現，相對於大流行前的水平，續訂率相當強勁，這正是我們對大流行前第二季度的預期。重要的是，我們還沒有看到任何交易下跌的跡象。我們看到 Aaron's 的客戶質量稍高，但我們尚未通過 BrandsMart 瀑布或 Aaron's 的數據發現顯著的交易下降。我們仍然相信，如果這種情況發生，將使我們受益。

And last thing I would say, and I'll let Steve touch a little bit. On BrandsMart is we're really focused right now on getting our shop in order, rightsizing and innovating our cost structure. And we believe if we do that going forward and the actions we've taken over the last 12 months, we've positioned ourselves really well, particularly with this direct-to-consumer, high operating leverage business to enjoy the benefits of the rebound when that does occur.

我要說的最後一件事是，我會讓史蒂夫接觸一下。在 BrandsMart 上，我們現在真正關注的是讓我們的商店井然有序、調整規模和創新我們的成本結構。我們相信，如果我們繼續這樣做，並在過去 12 個月中採取行動，我們就已經做好了自己的定位，特別是通過這項直接面向消費者的高運營槓桿業務，享受反彈帶來的好處當這種情況確實發生時。

So challenging demand trends, pull forward in demand, Steve will talk about that a little bit, but we feel good about what we can control and how we set up the business for the future.

因此，挑戰需求趨勢，推動需求向前發展，史蒂夫會稍微談一下這一點，但我們對我們可以控制的內容以及我們如何為未來建立業務感到滿意。

Great. Thanks, Douglas.

偉大的。謝謝，道格拉斯。

Kyle, just quickly touch on BrandsMart. We believe that the retail customer, obviously, in these large ticket discretionary purchases, obviously, is more sensitive to macro trends. When you think about demand on the BrandsMart side, that negative 20%, it really can be broken down into about half that is related to just transactions or transactions down approximately 10%. And the other half is our average transaction value, down about 10% as well.

凱爾，請快速訪問 BrandsMart。我們認為，顯然，零售客戶在這些大宗可自由支配的購買中，顯然對宏觀趨勢更加敏感。當你考慮 BrandsMart 方面的需求時，即負 20%，它實際上可以分解為大約一半與交易或交易下降大約 10% 相關。另一半是我們的平均交易額，也下降了大約10%。

So what we're facing is not only a demand trend challenge, truly, on transactions, but just a step back in our average transaction value versus what we saw last year. Average transaction value is still well ahead of prepandemic averages, double digits well ahead of that. We're just facing a little bit step down, especially in appliances.

因此，我們面臨的不僅是交易方面的需求趨勢挑戰，而且是我們的平均交易價值與去年相比的倒退。平均交易額仍遠遠高於大流行前的平均水平，遠遠領先於兩位數。我們只是面臨著一點點的下滑，尤其是在家電領域。

In addition, I'd just say that we are really focused on profitability in the BrandsMart business and not chasing those unprofitable sales that sometimes happen especially in the consumer electronics category. So we still believe in the business and team's focused really hard to find ways to continue to find growth.

此外，我只想說，我們真正關注的是 BrandsMart 業務的盈利能力，而不是追逐那些有時會發生的無利可圖的銷售，尤其是在消費電子產品類別中。因此，我們仍然相信業務和團隊會努力尋找繼續增長的方法。

Yes, I'll just reiterate that we're super excited about the long-term potential of BrandsMart. We are going through a cycle and Steve and his team are doing a great job of controlling costs.

是的，我只想重申，我們對 BrandsMart 的長期潛力感到非常興奮。我們正在經歷一個週期，史蒂夫和他的團隊在控製成本方面做得很好。

Got it. Very helpful. And then just a follow-up on BrandsMart. Can you give us a sense for what the 2-year stack of the comp looks like? And then give us a sense for when you anticipate the comp really easing if our comps for BrandsMart had a very strong 2Q '22, do those comps get a little bit easier in the back half of this year?

知道了。很有幫助。然後是 BrandsMart 的後續行動。您能否讓我們了解一下 2 年的比較堆棧是什麼樣的？然後讓我們了解一下，如果您預計 BrandsMart 的比較在 22 年第二季度表現非常強勁，那麼您預計比較會真正放鬆，那麼這些比較在今年下半年會變得容易一些嗎？

Kyle, it's Kelly. I'll answer the first part of that. So as it relates to a 2-year comp, you may recall, we acquired the company just over a year ago. And so we've not provided detailed financials on the period prior to us owning them. So we don't have a 2-year stack comp to provide to you here. But what I would say, as we think about going to rest of this year, Steve, you want to speak to kind of the comps and what we'd expect to lap over as we go into Q3 and Q4?

凱爾，是凱利。我將回答第一部分。因此，由於它涉及兩年期補償，您可能還記得，我們一年多前收購了該公司。因此，我們沒有提供在我們擁有它們之前的時期的詳細財務數據。所以我們這裡沒有 2 年的堆棧比較可以提供給您。但我想說的是，當我們考慮今年剩下的時間時，史蒂夫，你想談談我們進入第三季度和第四季度時的比較情況以及我們預計會發生什麼？

Sure. Yes. So as Douglas referenced and I referenced, we expect continued demand challenges in the back half of the year. With that said, we do believe we will see sequential improvement in comparable sales into Q3 and through Q4 as we lap some numbers.

當然。是的。因此，正如道格拉斯和我提到的那樣，我們預計今年下半年需求將繼續面臨挑戰。話雖如此，我們確實相信，隨著我們取得一些數據，我們將看到第三季度和第四季度的可比銷售額連續改善。

Our next question comes from Vincent Caintic from Stephens.

我們的下一個問題來自斯蒂芬斯的文森特·凱恩蒂克。

Nice to see the additional accounts of the hub-and-spoke model and the GenNext stores. I was just wondering from a productivity perspective, if you can talk about the benefits of that hub-and-spoke and GenNext model as it relates to when we think about, say, for example, EBITDA margins.

很高興看到中心輻射模型和 GenNext 商店的其他帳戶。我只是想從生產力的角度來看，您是否可以談談中心輻射型和 GenNext 模型的好處，因為它與我們考慮 EBITDA 利潤率等問題相關。

Yes. Thanks, Vincent. It's Douglas.

是的。謝謝，文森特。是道格拉斯。

So we opened 11 GenNext stores in the first quarter and 8 in the second quarter. Our target is 50 for this year, and we're on track for that. And I believe we opened 72 showrooms since the end of 2022, 59 of which were in this quarter. So we're right on track for 100 showrooms this year. And the beauty of the hub and showroom model is all this innovation we've put in place over the last 5 years, building larger, more relevant GenNext stores and then creating digital platforms for our customer to interact with us where they want to be served, has allowed us to build this platform in which we can optimize the markets we serve, not -- and so we're serving the same markets but we're doing it with a more efficient cost structure.

因此，我們在第一季度開設了 11 家 GenNext 商店，在第二季度開設了 8 家。我們今年的目標是 50 個，我們正在朝著這個目標邁進。我相信自 2022 年底以來，我們開設了 72 個展廳，其中 59 個是在本季度。因此，我們今年有望開設 100 個展廳。中心和陳列室模式的美妙之處在於我們在過去5 年裡所實施的所有創新，建立了更大、更相關的GenNext 商店，然後創建數字平台，讓我們的客戶可以在他們想要獲得服務的地方與我們互動，使我們能夠建立這個平台，在這個平台中我們可以優化我們所服務的市場，而不是——所以我們服務於相同的市場，但我們正在以更有效的成本結構來做到這一點。

I think at the time of spin, we articulated fewer larger stores and bigger e-com. And I think what I'd add to that now is potentially having further reach within the markets of these showrooms. Showrooms are effectively just sales stores. They're typically staffed with 2 people. They're smaller box. They don't have a warehouse. The hubs that feed them are larger stores, many of them are GenNext but there are some legacy stores. And those stores house our distribution, our logistics and delivery and returns. They also house all of our servicing for the market. And so we're able to put a central hub in place, say in the county seat, they then have 1 or 2 showrooms around it to gain greater productivity in the market.

我認為在旋轉時，我們明確了更少的大型商店和更大的電子商務。我認為我現在要補充的是，可能會進一步影響這些陳列室的市場。陳列室實際上只是銷售商店。他們通常配備 2 人。它們是較小的盒子。他們沒有倉庫。為他們提供服務的中心是較大的商店，其中許多是 GenNext，但也有一些傳統商店。這些商店負責我們的分銷、物流、送貨和退貨。它們還提供我們為市場提供的所有服務。因此，我們能夠建立一個中心樞紐，比如在縣城，然後在其周圍設立 1 或 2 個陳列室，以提高市場生產力。

In terms of cost effectiveness, it is EBITDA enhancing for that group of stores. We're typically taking out a few headcount when we do that, but it's between $100,000 and $120,000 a year per store that we program in terms of cost efficiency.

就成本效益而言，這組商店的 EBITDA 有所提高。當我們這樣做時，我們通常會抽出一些員工，但我們根據成本效率規劃，每家商店每年的成本在 100,000 美元到 120,000 美元之間。

So some of what you're seeing coming through this quarter and our cost efficiency is the benefit of hub and showroom. But there's also obviously benefits of marketing analytics and supply chain that are in there as well coming through.

因此，您在本季度看到的一些內容以及我們的成本效率是中心和陳列室的好處。但營銷分析和供應鏈也明顯帶來好處。

Okay. Great. It's nice to see the expense efficiency in this quarter's results.

好的。偉大的。很高興看到本季度業績的費用效率。

The second question, just if -- so you highlighted you're not really seeing the maybe trade down activity yet. But if you can maybe talk about how you expect that to play out over time? And maybe what sort of consumer behaviors you expect to see as we go through the next couple of quarters in tough times.

第二個問題，如果 - 所以你強調你還沒有真正看到可能的交易活動。但您是否可以談談您希望隨著時間的推移，這種情況會如何發展？也許當我們度過接下來的幾個季度的困難時期時，您期望看到什麼樣的消費者行為。

Yes. Vincent, it's Kelly. I'll speak to the trade down and then how it impacts the outlook that we've provided. So similar to last quarter, we've not assumed that we'll see any significant trade down in the numbers that we've put out. So that would be upside to our outlook if we do see that continue to happen.

是的。文森特，這是凱利。我將討論交易的下跌以及它如何影響我們提供的前景。與上季度類似，我們並沒有假設我們發布的數字會出現任何重大下降。因此，如果我們確實看到這種情況繼續發生，那將對我們的前景有利。

I mean, we do continue to believe that the customer is a bit constrained relative to what they were certainly during the pandemic. From a renewal rate perspective, we are seeing improvement year-over-year and we expect to see that in the back half of this year, so slightly better renewal rates than what we saw in Q3 and Q4 last year, but not quite back to the levels that we'd expect going into 2024.

我的意思是，我們確實仍然相信，與大流行期間的情況相比，客戶受到了一些限制。從續訂率的角度來看，我們看到同比有所改善，我們預計在今年下半年會看到這一點，因此續訂率比去年第三季度和第四季度的情況略好，但還沒有完全恢復到原來的水平。我們預計 2024 年的水平。

Yes. I would sit that squarely on the back of the decisioning we put in place and in the customer acclimating, as I mentioned earlier.

是的。正如我之前提到的，我會完全支持我們做出的決定以及客戶的適應情況。

I do want to say one last thing. While we haven't assumed a trade down, and we're not prognosticating on that, but we do think it would benefit us. This pull-forward of demand will release at some point. And particularly in the BrandsMart business, where we're down 20%. 55% of our sales mix is appliances, which is an important household category. It has a regular replacement cycle. And so that we expect to drive future revenue. That has a little longer tail than the replacement cycle for computers and electronics, but we feel like both of those businesses will return. And we've got a competitive advantage in those with BrandsMart [model] (inaudible)

我想說最後一件事。雖然我們沒有假設交易會下跌，而且我們也沒有對此進行預測，但我們確實認為這將使我們受益。這種需求的前拉將在某個時候釋放出來。尤其是 BrandsMart 業務，我們下降了 20%。我們銷售組合的 55% 是電器，這是一個重要的家居類別。它有定期更換週期。因此我們預計會推動未來的收入。這比計算機和電子產品的更換週期要長一些，但我們認為這兩項業務都會回歸。我們在擁有 BrandsMart [模型] 的企業中擁有競爭優勢（聽不清）

We have our next question comes from Scott Ciccarelli from Truist.

我們的下一個問題來自 Truist 的 Scott Ciccarelli。

This is Joe on for Scott. Given that you're seeing some of the demand hold up better in the LTO side of the business, can you talk about integrating that solution into the BrandsMart channel?

這是喬替斯科特發言。鑑於您發現 LTO 業務方面的一些需求保持得更好，您能否談談將該解決方案集成到 BrandsMart 渠道中？

Sure. This is Steve Olsen. I'd be glad to answer that.

當然。這是史蒂夫·奧爾森。我很樂意回答這個問題。

Just a reminder, we implemented our BrandsMart leasing solution last year in the May time period. And we continue to be very pleased with the results of that and the continued improvement growth on the team's integration, the BrandsMart Store team with the BrandsMart leasing team as well as process and technology improvements.

請注意，我們在去年 5 月期間實施了 BrandsMart 租賃解決方案。我們仍然對這一結果以及團隊整合、BrandsMart 商店團隊與 BrandsMart 租賃團隊以及流程和技術改進的持續改進增長感到非常滿意。

From a performance standpoint, we continue to see the portfolio grow on the BrandsMart leasing side as well as the customer payment activity. So it's a key focus for us and one that we hope and expect to drive further growth.

從業績的角度來看，我們繼續看到 BrandsMart 租賃方面的投資組合以及客戶付款活動不斷增長。因此，這是我們的重點關注點，也是我們希望並期望推動進一步增長的重點。

Got you. Cool. And then just on the 5.5% to 6.5% write-offs for the year. Is that still what we should be thinking about? And if any color you can give on the cadence between 3Q and 4Q would be super helpful.

明白你了。涼爽的。然後是今年 5.5% 至 6.5% 的沖銷。這仍然是我們應該思考的嗎？如果您可以在 3Q 和 4Q 之間的節奏上提供任何顏色，將會非常有幫助。

Yes. So we are still expecting write-offs in the range of 5.5% to 6.5%. So no change there in what we had updated you on the last call. We're very happy with the performance in the fourth quarter and kind of happy with the trends as we move into Q3 and beyond.

是的。因此，我們仍預計沖銷將在 5.5% 至 6.5% 的範圍內。因此，我們在上次通話中向您更新的內容沒有變化。我們對第四季度的表現非常滿意，並對進入第三季度及以後的趨勢感到滿意。

As it relates to write-off trends in the back part of the year, there is seasonality in the business. So we would expect that write-offs would increase, but we expect them to continue to be below write-off levels that we experienced in the same quarters of 2022.

由於涉及下半年的核銷趨勢，業務存在季節性。因此，我們預計沖銷將會增加，但我們預計沖銷將繼續低於 2022 年同一季度的沖銷水平。

Our next question comes from Bobby Griffin from Raymond James.

我們的下一個問題來自雷蒙德·詹姆斯的鮑比·格里芬。

This is Alessandra Jimenez on for Bobby Griffin.

我是鮑比·格里芬的亞歷山德拉·希門尼斯。

First, on the Aaron's side of the business, despite ending the quarter with a larger-than-expected lease portfolio size, you left the year unchanged. Is that primarily driven by some caution given the unknown impact on how customers that chose not to utilize the 90-day buyout will it behave longer term? Or is there something else?

首先，在亞倫的業務方面，儘管本季度結束時租賃組合規模超出預期，但全年保持不變。考慮到選擇不利用 90 天買斷的客戶的長期行為是否會受到未知的影響，這是否主要是出於某種謹慎的考慮？或者還有別的什麼嗎？

Yes. What we're seeing there, Alessandra, it's Kelly, is we continue to expect demand to be challenged going into the back half of the year. We talked about that earlier in the call. And so what we're seeing is as we go into Q3 and Q4 with the lower EPO activity, early payout activities, in Q1 and Q2. those deals are kind of rolling into Q3 and Q4 and paying off. So higher levels of payoffs relative to prior periods. And so that continues to impact demand in the second half of the year -- or the at lease portfolio size in the second half of the year. And again, we're focused on -- in Q3 and Q4 on growing that portfolio as we head into 2024.

是的。亞歷山德拉，我是凱利，我們看到的是，我們繼續預計今年下半年需求將面臨挑戰。我們在早些時候的電話會議中談到了這一點。因此，我們看到的是，當我們進入第三季度和第四季度時，第一季度和第二季度的 EPO 活動、早期支付活動較低。這些交易將進入第三季度和第四季度並獲得回報。因此相對於前期的回報水平更高。因此，這將繼續影響下半年的需求，或者下半年的租賃投資組合規模。再次強調，在進入 2024 年時，我們將在第三季度和第四季度重點關注擴大該投資組合。

Okay. That's very helpful. And then maybe on the BrandsMart segment, can you walk us through the puts and takes to get to consistent EBITDA in the segment despite lower expected revenue?

好的。這非常有幫助。然後，也許在 BrandsMart 細分市場上，您能否向我們介紹一下如何在該細分市場中實現一致的 EBITDA（儘管預期收入較低）？

Puts and takes to get to consistent EBITDA, I would say that on the BrandsMart side, what we're focused on is implementing the cost necessary to run the business and to set the company up for sustained growth going forward, one. Two, the team has done a great job in a declining revenue environment, managing the cost that we can control to preserve margin. As we come out of the current depressed demand environment, return to some level of normal, we feel very good about the leverage that we're going to pick up as the top line starts to grow, and we continue to maintain. Between that and the addition of the new store going into next year and the new stores thereafter, as we grow top line, we would expect margin to expand as we're leveraging those fixed costs.

為了實現一致的 EBITDA，我想說，在 BrandsMart 方面，我們重點關注的是實施運營業務所需的成本，並使公司為未來的持續增長做好準備，一。第二，該團隊在收入下降的環境中做得很好，管理了我們可以控制的成本以保持利潤。當我們擺脫當前低迷的需求環境，恢復到一定程度的正常水平時，我們對隨著營收開始增長而將獲得的槓桿感到非常滿意，並且我們將繼續維持這一水平。在這與明年增加的新店以及此後的新店之間，隨著我們收入的增長，我們預計利潤率會隨著我們利用這些固定成本而擴大。

Yes, Alessandra, this is Douglas.. The last thing I would say, is Steve and his team have done a great job on both the purchasing side on the pricing side. of maintaining that business and preserving margin. As you know, it's a sort of a mid-20% margin business. And so while the revenue declines hurt, there are ways to offset that, and they've done a good job with that. Steve, I don't know if you want to comment a bit on that.

是的，亞歷山德拉，這是道格拉斯。我要說的最後一件事是，史蒂夫和他的團隊在採購方面和定價方面都做得很好。維持該業務並保持利潤。如您所知，這是一種利潤率為 20% 左右的業務。因此，儘管收入下降造成了影響，但有一些方法可以抵消這種影響，而且他們在這方面做得很好。史蒂夫，我不知道你是否想對此發表評論。

Yes. Just mentioned one of the key drivers though of the BrandsMart value proposition is our ability to purchase great products and great deals. And the team continues similarly, as we mentioned in the prepared remarks, we continue to focus on strategic pricing actions and manage the business where there's opportunity to adjust pricing for a margin improvement. We do that as well as obviously those that we want to focus really on a value price to make sure we're competitive in the market. We do that as well.

是的。剛才提到 BrandsMart 價值主張的關鍵驅動因素之一是我們購買優質產品和優惠的能力。正如我們在準備好的評論中提到的那樣，團隊將繼續關注戰略定價行動，並在有機會調整定價以提高利潤率的情況下管理業務。我們這樣做的同時，顯然我們也希望真正關注價值價格，以確保我們在市場上具有競爭力。我們也這樣做。

So we will continue to focus both on the procurement side through continued improved purchasing power as well as the pricing side through strategic pricing actions.

因此，我們將繼續通過持續提高購買力來關注採購方面，並通過戰略定價行動來關注定價方面。

And then just a reference for Kelly, just further expense management as we move through this challenging demand environment, just continue to focus on any areas of the expense side of the business, including store labor, to align it with the demand cycle.

然後只是凱利的一個參考，在我們經歷這個充滿挑戰的需求環境時，進一步進行費用管理，繼續關注業務費用方面的任何領域，包括商店勞動力，以使其與需求週期保持一致。

That's very helpful. And then lastly for me, it's a little bit hard to parse out given the difference between consumer electronics and appliances in the BrandsMart segment. But do you believe that BrandsMart comp was performing relatively in line with the industry average in 2Q?

這非常有幫助。最後對我來說，考慮到 BrandsMart 細分市場中的消費電子產品和電器之間的差異，這有點難以解析。但您認為 BrandsMart 第二季度的表現與行業平均水平相對一致嗎？

I don't really want to speak about the industry average, but I will tell -- I'll give you a little more context on -- to break down the BrandsMart comp in Q2.

我真的不想談論行業平均水平，但我會告訴你 - 我會給你更多背景信息 - 分解第二季度的 BrandsMart 比較。

So appliances, under pressure being 50% of our business and the majority of that pressure is in the average selling price, which was down approximately 10% versus the prior year, where the overall average selling price for the business, that was down about 6%. We're facing headwinds in consumer electronics across categories, especially in TVs and that more a result of the significant pull forward in demand that occurred in the prior few years.

因此，家電業務占我們業務的 50%，其中大部分壓力來自平均售價，與上一年相比下降了約 10%，去年該業務的整體平均售價下降了約 6% %。我們在各個類別的消費電子產品領域都面臨著阻力，尤其是電視領域，這更多是前幾年需求大幅增長的結果。

The categories that we're seeing slightly better performance in, our small appliances and other household goods seeing what we believe, obviously, lower ticket products, some improvement in trend. The team has done a great job to continue to expand out that assortment and ensure we have the right prices and the right inventory levels.

我們看到小家電和其他家庭用品的表現稍好一些，我們相信，顯然，價格較低的產品，趨勢有所改善。該團隊在繼續擴大產品種類並確保我們擁有合適的價格和合適的庫存水平方面做得非常出色。

Our next question comes from Anthony Chukumba from Loop Capital Markets.

我們的下一個問題來自 Loop Capital Markets 的 Anthony Chukumba。

I guess my first question was on the weekly payment option. You mentioned that you had rolled that out to aarons.com. I know you've had it in your stores for quite some time.

我想我的第一個問題是關於每週付款選項。您提到您已將其推廣到 aarons.com。我知道你的商店裡已經有它很長一段時間了。

I guess 2 questions, related. First one, what have you seen in terms of uptake on that weekly pricing option or weekly payment option? And then as far as you can tell, how much of that is incremental customers as opposed to someone who would have paid monthly and is instead taking advantage of the weekly payment option?

我猜有兩個相關的問題。首先，您對每周定價選項或每週付款選項的採用情況有何看法？據您所知，其中有多少是增量客戶，而不是那些按月付款並利用每週付款選項的客戶？

Sure, Anthony. This is Steve Olsen. I'd be glad to answer that.

當然，安東尼。這是史蒂夫·奧爾森。我很樂意回答這個問題。

First, I just want to say we're really excited about offering this weekly payment option across our channels, both in store and online. We think it really gives the customer flexibility and we know from research that flexibility is an important decision driver as they decide what categories and products to lease.

首先，我只想說，我們非常高興能夠通過我們的渠道（包括商店和在線渠道）提供每週付款選項。我們認為這確實為客戶提供了靈活性，而且我們從研究中得知，靈活性是他們決定租賃哪些類別和產品時的重要決策驅動因素。

From a performance standpoint, really hard to break down what's truly incremental. And what we really look at this leasing business is what are the benefits of it? What do we call success? It's really allowing us to land and deliver our strong value message with very competitive lease rates across the business that we're using, both on our e-commerce channel as well as all of our traditional marketing.

從性能的角度來看，很難分解什麼是真正的增量。而我們真正看這個租賃業務是它的好處是什麼？我們所謂的成功是什麼？它確實使我們能夠在我們所使用的業務中以極具競爭力的租賃費率落地並傳遞我們強大的價值信息，無論是在我們的電子商務渠道還是我們所有的傳統營銷方面。

So weekly is still a small piece of our overall business, less than 10%. But we think it's a key driver in landing our value proposition in our low price message.

所以每週仍然是我們整體業務的一小部分，不到 10%。但我們認為這是在我們的低價信息中實現我們的價值主張的關鍵驅動力。

Yes. And Anthony, this is Douglas. I mean we're not going to disclose our penetration online or in stores, but it has been growing. And we do think that these weekly price points we put out are very competitive, particularly in our key core assortment, and we're excited about that. I mean as you know, this isn't about us trying to become a weekly shop. It's about us trying to put together -- put forward the best price for we can in the margin [which shows] our best core value. And so we believe over time, we'll take share by doing that.

是的。安東尼，這是道格拉斯。我的意思是，我們不會透露我們在網上或商店的滲透率，但它一直在增長。我們確實認為我們推出的這些每週價格點非常有競爭力，特別是在我們的關鍵核心品種中，我們對此感到興奮。我的意思是，如您所知，這並不是我們試圖成為每週一次的商店。這是關於我們試圖整合起來——在利潤範圍內提出最好的價格，[這顯示了]我們最好的核心價值。因此，我們相信，隨著時間的推移，我們將通過這樣做來獲得份額。

Got it. And then just one quick clarification. Is the weekly payment option available for leases that are originated in BrandsMart stores?

知道了。然後簡單澄清一下。源自 BrandsMart 商店的租賃是否可以使用每週付款選項？

Not at this time. So focused more on the 18-month and 24-month lease options.

目前還不行。因此，我們更關注 18 個月和 24 個月的租賃選項。

But the...

但是...

Sorry, the 12 and 18 months. I apologize for that.

抱歉，是 12 個月和 18 個月。我對此表示歉意。

Yes, that's turned. But the pay frequency, there is flexibility and pay frequency within the branch of our stores, Anthony.

是的，事情變了。但是支付頻率，我們安東尼商店的分店內有靈活性和支付頻率。

We have our last question comes from Jason Haas from Bank of America.

我們的最後一個問題來自美國銀行的賈森·哈斯。

I'm curious to know how you're thinking about the lease portfolio size in the remainder of the year. What are you expecting there from like a -- where it should end the year at or what the growth looks like in the rest of the year?

我很想知道您如何看待今年剩餘時間內的租賃投資組合規模。您對今年的結束時間有何期望，或者今年剩餘時間的增長情況如何？

Jason, it's Douglas. I'll just give it to you a high level. As you know, we started the year down a little over 7%, lease portfolio size. And at the time we communicated that, that number would be more negative towards the middle of the year as we had more churn in the first part of the year and because of the demand environment we were in, in the first part of the year and then would improve throughout the rest of the year, but still to a negative number.

傑森，我是道格拉斯。我只會給你一個高水平。如您所知，我們年初的租賃投資組合規模下降了 7% 以上。當時我們表示，這個數字在今年中期會更加負面，因為我們在今年上半年有更多的客戶流失，而且由於今年上半年我們所處的需求環境，然後在今年剩餘時間裡會有所改善，但仍為負數。

We're still seeing that curve of sort of troughing in the middle of the year and improving to the back part of the year, but it's not as much as before. So we're still -- we're not giving a number for the end of the year, but we still expect the lease portfolio to be down at the back part of the year, but more influenced by incrementally softer demand in the second half of the year.

我們仍然看到這種曲線在年中陷入低谷，並在今年下半年有所改善，但沒有以前那麼多了。因此，我們仍然沒有給出年底的數字，但我們仍然預計租賃組合將在今年下半年下降，但更多地受到下半年需求逐漸疲軟的影響今年的。

Got it. That's helpful. And then as a follow-up, I'm curious to get a sense for what happened with BrandsMart through the quarter because you had guided at the end of April for the rate prior BrandsMart revenue guidance?

知道了。這很有幫助。作為後續行動，我很想了解 BrandsMart 在本季度發生的情況，因為您在 4 月底就之前的 BrandsMart 收入指導率進行了指導？

And then if I recalled the commentary right, it sounded like BrandsMart got better through the year, but now you're lowering the revenue guidance. So have you always been anticipating an acceleration through the quarter? It just wasn't as much as you hoped for, which I guess, yes, what was the -- like why did you expect an acceleration through the quarter? Or if it's not that, what's changing and how you're thinking about the back half of the year there?

如果我沒記錯評論的話，聽起來 BrandsMart 這一年變得更好了，但現在你降低了收入指導。那麼您是否一直預計本季度會出現加速？只是沒有達到您所希望的程度，我想，是的，您為什麼預計本季度會出現加速？或者如果不是這樣，有什麼變化以及您對下半年的看法如何？

Yes, I'll be glad to answer that. This is Steve. So as we said in Q1, we were experiencing pressure in demand. As we got into deep into Q2, obviously, that demand pressure continued. We did see a slight improvement in demand as Q2 progressed, especially during our key promotional periods around the holidays. And with our original guidance, we were expecting improvement in demand throughout the back half of the year really tied to replacement cycle of products. And as we've stated previously, using just consumer electronics as a base, that replacement cycle is typically in the (inaudible) and when you look back at, obviously, at the pandemic years, you'd expect some of those purchases now that occurred a few years ago with customers will be coming in for replacement.

是的，我很樂意回答這個問題。這是史蒂夫。正如我們在第一季度所說，我們面臨著需求壓力。隨著我們進入第二季度，顯然，需求壓力仍在持續。隨著第二季度的進展，我們確實看到需求略有改善，尤其是在假期期間的關鍵促銷期間。根據我們最初的指導，我們預計今年下半年的需求改善實際上與產品的更換週期有關。正如我們之前所說，僅以消費電子產品為基礎，更換週期通常是在（聽不清），顯然，當您回顧大流行時期時，您會期望其中一些購買現在發生在幾年前，客戶會過來更換。

So we're just trying to be a little cautious with the BrandsMart demand. We do believe the back half of the year will improve from the first half as we lap some easier comps in the business going forward. But one is we just want to see some consistent improved trends in demand.

因此，我們只是對 BrandsMart 的需求持謹慎態度。我們確實相信，隨著我們在未來的業務中採取一些更容易的競爭，今年下半年的情況將比上半年有所改善。但其中之一是我們只是希望看到需求出現一些持續改善的趨勢。

Thank you. We have no further questions from the line. I will now pass back to Douglas Lindsay for closing remarks.

謝謝。我們沒有進一步的問題。我現在請道格拉斯·林賽 (Douglas Lindsay) 致閉幕詞。

Thank you, operator. We appreciate everyone who's joined us today. As we wrap up, I want to thank our team members at Aaron's and BrandsMart and Woodhaven and our franchisees for their relentless focus on delivering exceptional value and service to our customers while continuing to innovate our business and control costs. As a company, we remain focused on executing our multiyear strategic plan and by investing in our growth strategies before us.

謝謝你，接線員。我們感謝今天加入我們的每一個人。最後，我要感謝 Aaron's、BrandsMart 和 Woodhaven 的團隊成員以及我們的特許經營商，他們堅持不懈地致力於為我們的客戶提供卓越的價值和服務，同時繼續創新我們的業務並控製成本。作為一家公司，我們仍然專注於執行我們的多年戰略計劃並投資於我們面前的增長戰略。

Thanks again for joining us today, and we'll talk to you soon.

再次感謝您今天加入我們，我們很快就會與您交談。

Thank you. Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines.

謝謝。女士們、先生們，今天的電話會議到此結束。感謝您的加入。您現在可以斷開線路。