Renting a 50 inch TV or faux leather couch doesn’t appear to be top of mind with lower income consumers as inflation for everything eats into budgets.

Shares of home goods rental outfit The Aaron’s Company crashed more than 25% pre-market on Tuesday after the company became the latest retailer to offer horrid guidance. The company now sees full year sales in a range of $2.19 billion to $2.27 billion compared to $2.32 billion to $2.39 billion previously. Earnings per share was revised down to $1.75 to $2.15 from $2.65 to $2.90 previously.

Aaron’s second quarter sales at its namesake rental business tanked 8% from a year ago. Sales were pressured by “lower lease renewal rates and lower exercise of early purchase options,” Aaron’s explained.

Adjusted operating profits for the segment plunged 38.9% from a year ago.

“In the Aaron’s Business, customer demand and payment activity progressively worsened through the quarter as high inflation impacted the lower-income consumer,” Aaron’s CEO Douglas Lindsay said in a statement. “In response to these challenging market conditions, we are leveraging our centralized lease decisioning and digital servicing platforms to maintain relationships with our customers and strengthening actions to control costs.”

Aaron’s joins a yawning list of household name retailers warning on the state of the inflation-hammered consumer.


The world’s largest retailer Walmart slashed its second quarter and full-year profit outlooks late Monday owing to rampant inflation and weakening demand for discretionary goods such as apparel. Walmart now sees full year earnings declining 11% to 13% compared a prior outlook for a 1% decline.

“The increasing levels of food and fuel inflation are affecting how customers spend, and while we’ve made good progress clearing hardline categories, apparel in Walmart U.S. is requiring more markdown dollars,” Walmart CEO Doug McMillon in a statement. “We’re now anticipating more pressure on general merchandise in the back half; however, we’re encouraged by the start we’re seeing on school supplies in Walmart U.S.”

Commenting on Walmart earnings, Jefferies analyst Stephanie Wissink wrote: “Even with deep discounts on discretionary goods, the consumer is proving reticent.”

In early June, Walmart’s primary rival Target kicked off concerns about the retail sector’s health with a shocking decision to liquidate massive amounts of slow-moving inventory and take a more cautious view on near-term profits.

Discretionary-focused retailers such as RH, Bed Bath & Beyond, Bath & Body Works and Kohl’s have also issued financial warnings for their second-quarter results.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

Click here for the latest trending stock tickers of the Yahoo Finance platform

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance

Download the Yahoo Finance app for Apple or Android

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube

Previous post US economy sending mixed signals: Here’s what it all means
Next post Bermuda’s International Business Advantages Highlighted in Hong Kong Webinar