AAN

00018213932022FYFALSEP5YP1YP5Y0.5P1YP2YP1YP3YP1YP1Y33.3333.3333.330.5SUBSEQUENT EVENTS 100230200.0five year1.7500018213932022-01-012022-12-3100018213932022-06-30iso4217:USD00018213932023-02-24xbrli:shares0001821393aan:BrandsMartMemberus-gaap:TradeNamesMember2022-04-012022-04-0100018213932022-12-3100018213932021-12-31iso4217:USDxbrli:shares0001821393aan:LeaseAndRetailRevenuesMember2022-01-012022-12-310001821393aan:LeaseAndRetailRevenuesMember2021-01-012021-12-310001821393aan:LeaseAndRetailRevenuesMember2020-01-012020-12-310001821393aan:RetailSalesMember2022-01-012022-12-310001821393aan:RetailSalesMember2021-01-012021-12-310001821393aan:RetailSalesMember2020-01-012020-12-310001821393aan:NonRetailSalesMember2022-01-012022-12-310001821393aan:NonRetailSalesMember2021-01-012021-12-310001821393aan:NonRetailSalesMember2020-01-012020-12-310001821393aan:FranchiseRoyaltiesAndOtherRevenuesMember2022-01-012022-12-310001821393aan:FranchiseRoyaltiesAndOtherRevenuesMember2021-01-012021-12-310001821393aan:FranchiseRoyaltiesAndOtherRevenuesMember2020-01-012020-12-3100018213932021-01-012021-12-3100018213932020-01-012020-12-310001821393us-gaap:TreasuryStockCommonMember2019-12-310001821393us-gaap:CommonStockMember2019-12-310001821393aan:InvestedCapitalMember2019-12-310001821393us-gaap:AdditionalPaidInCapitalMember2019-12-310001821393us-gaap:RetainedEarningsMember2019-12-310001821393us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-3100018213932019-12-310001821393aan:InvestedCapitalMember2020-01-012020-12-310001821393us-gaap:AdditionalPaidInCapitalMember2020-01-012020-12-310001821393us-gaap:RetainedEarningsMember2020-01-012020-12-310001821393us-gaap:CommonStockMember2020-01-012020-12-310001821393us-gaap:TreasuryStockCommonMember2020-01-012020-12-310001821393us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-12-310001821393us-gaap:TreasuryStockCommonMember2020-12-310001821393us-gaap:CommonStockMember2020-12-310001821393aan:InvestedCapitalMember2020-12-310001821393us-gaap:AdditionalPaidInCapitalMember2020-12-310001821393us-gaap:RetainedEarningsMember2020-12-310001821393us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-3100018213932020-12-310001821393us-gaap:RetainedEarningsMember2021-01-012021-12-310001821393us-gaap:AdditionalPaidInCapitalMember2021-01-012021-12-310001821393us-gaap:TreasuryStockCommonMember2021-01-012021-12-310001821393us-gaap:CommonStockMember2021-01-012021-12-310001821393us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-12-310001821393us-gaap:TreasuryStockCommonMember2021-12-310001821393us-gaap:CommonStockMember2021-12-310001821393aan:InvestedCapitalMember2021-12-310001821393us-gaap:AdditionalPaidInCapitalMember2021-12-310001821393us-gaap:RetainedEarningsMember2021-12-310001821393us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001821393us-gaap:RetainedEarningsMember2022-01-012022-12-310001821393us-gaap:AdditionalPaidInCapitalMember2022-01-012022-12-310001821393us-gaap:TreasuryStockCommonMember2022-01-012022-12-310001821393us-gaap:CommonStockMember2022-01-012022-12-310001821393us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-12-310001821393us-gaap:TreasuryStockCommonMember2022-12-310001821393us-gaap:CommonStockMember2022-12-310001821393aan:InvestedCapitalMember2022-12-310001821393us-gaap:AdditionalPaidInCapitalMember2022-12-310001821393us-gaap:RetainedEarningsMember2022-12-310001821393us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001821393aan:BrandsMartMember2022-01-012022-12-310001821393aan:BrandsMartMember2021-01-012021-12-310001821393aan:BrandsMartMember2020-01-012020-12-310001821393us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2022-01-012022-12-310001821393us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2021-01-012021-12-310001821393us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2020-01-012020-12-310001821393aan:BrandsMartMember2022-04-01xbrli:pure0001821393aan:BrandsMartMember2022-04-012022-04-01aan:store0001821393us-gaap:EntityOperatedUnitsMember2022-12-310001821393us-gaap:EntityOperatedUnitsMember2021-12-310001821393us-gaap:EntityOperatedUnitsMember2020-12-310001821393us-gaap:FranchisedUnitsMember2022-12-310001821393us-gaap:FranchisedUnitsMember2021-12-310001821393us-gaap:FranchisedUnitsMember2020-12-310001821393aan:BrandsMartMember2022-12-310001821393aan:BrandsMartMember2021-12-310001821393aan:BrandsMartMember2020-12-310001821393us-gaap:EntityOperatedUnitsMembersrt:MinimumMember2022-12-31utr:sqft0001821393us-gaap:EntityOperatedUnitsMembersrt:MaximumMember2022-12-31aan:segment0001821393aan:BrandsMartMember2022-12-310001821393aan:SalesAndLeaseOwnershipMemberaan:AgreementOneMember2022-12-310001821393aan:SalesAndLeaseOwnershipMemberaan:AgreementTwoMember2022-12-310001821393aan:AgreementThreeMemberaan:SalesAndLeaseOwnershipMember2022-12-310001821393srt:MinimumMemberaan:MerchandiseOnLeaseMember2022-01-012022-12-310001821393srt:MaximumMemberaan:MerchandiseOnLeaseMember2022-01-012022-12-310001821393aan:MerchandiseNotOnLeaseMember2022-01-012022-12-310001821393aan:MerchandiseOnLeaseMember2022-12-310001821393aan:MerchandiseOnLeaseMember2021-12-310001821393aan:MerchandiseNotOnLeaseMember2022-12-310001821393aan:MerchandiseNotOnLeaseMember2021-12-310001821393us-gaap:OperatingSegmentsMemberaan:ManufacturingMember2022-12-310001821393us-gaap:OperatingSegmentsMemberaan:ManufacturingMember2021-12-310001821393us-gaap:ShippingAndHandlingMember2022-01-012022-12-310001821393us-gaap:ShippingAndHandlingMember2021-01-012021-12-310001821393us-gaap:ShippingAndHandlingMember2020-01-012020-12-310001821393aan:RetirementRelatedModificationsMember2022-01-012022-12-310001821393aan:RetirementRelatedModificationsMember2021-01-012021-12-310001821393us-gaap:TradeAccountsReceivableMember2022-12-310001821393us-gaap:TradeAccountsReceivableMember2021-12-310001821393aan:CorporateReceivableMember2022-12-310001821393aan:CorporateReceivableMember2021-12-310001821393aan:FranchiseeReceivableMember2022-12-310001821393aan:FranchiseeReceivableMember2021-12-310001821393us-gaap:BuildingAndBuildingImprovementsMembersrt:MinimumMember2022-01-012022-12-310001821393us-gaap:BuildingAndBuildingImprovementsMembersrt:MaximumMember2022-01-012022-12-310001821393srt:MinimumMemberus-gaap:OtherCapitalizedPropertyPlantAndEquipmentMember2022-01-012022-12-310001821393srt:MaximumMemberus-gaap:OtherCapitalizedPropertyPlantAndEquipmentMember2022-01-012022-12-310001821393us-gaap:ComputerSoftwareIntangibleAssetMembersrt:MinimumMember2022-01-012022-12-310001821393us-gaap:ComputerSoftwareIntangibleAssetMembersrt:MaximumMember2022-01-012022-12-310001821393aan:ComputerSoftwareUpdateIntangibleAssetMembersrt:MaximumMember2022-01-012022-12-310001821393us-gaap:ComputerSoftwareIntangibleAssetMember2022-01-012022-12-310001821393us-gaap:ComputerSoftwareIntangibleAssetMember2021-01-012021-12-310001821393us-gaap:ComputerSoftwareIntangibleAssetMember2020-01-012020-12-310001821393aan:DAMIMember2022-01-012022-12-310001821393aan:DAMIMember2021-01-012021-12-310001821393aan:DAMIMember2020-01-012020-12-310001821393us-gaap:AccountsPayableAndAccruedLiabilitiesMember2022-12-310001821393us-gaap:AccountsPayableAndAccruedLiabilitiesMember2021-12-310001821393country:CAus-gaap:OperatingSegmentsMemberaan:AaronsBusinessMember2022-12-310001821393country:CAus-gaap:OperatingSegmentsMemberaan:AaronsBusinessMember2021-12-310001821393us-gaap:LineOfCreditMembersrt:MinimumMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2022-01-012022-12-310001821393us-gaap:LineOfCreditMembersrt:MaximumMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2022-01-012022-12-310001821393us-gaap:LineOfCreditMember2022-01-012022-12-310001821393aan:BrandsMartMember2022-04-012022-12-310001821393aan:BrandsMartMember2022-12-312022-12-310001821393aan:BrandsMartMemberus-gaap:NoncompeteAgreementsMember2022-04-012022-04-010001821393aan:BrandsMartMemberus-gaap:CustomerListsMember2022-04-012022-04-010001821393aan:BrandsMartMember2022-10-012022-12-310001821393aan:BrandsMartMember2021-10-012021-12-310001821393aan:FranchiseeAcquisitionsMember2021-01-012021-12-310001821393aan:FranchiseeAcquisitionsMember2022-01-012022-12-310001821393aan:FranchiseeAcquisitionsMember2021-12-310001821393aan:FranchiseeAcquisitionsMember2020-12-3100018213932022-10-012022-12-31aan:reportingUnit0001821393aan:BrandsMartMember2022-06-300001821393us-gaap:GoodwillMemberaan:BrandsMartLeasingMember2022-01-012022-12-310001821393aan:AaronsBusinessMember2020-12-310001821393aan:BrandsMartMemberaan:ReportingUnitsExcludingLeasingMember2020-12-310001821393aan:BrandsMartMemberaan:BrandsMartLeasingMember2020-12-310001821393aan:AaronsBusinessMember2021-01-012021-12-310001821393aan:BrandsMartMemberaan:ReportingUnitsExcludingLeasingMember2021-01-012021-12-310001821393aan:BrandsMartMemberaan:BrandsMartLeasingMember2021-01-012021-12-310001821393aan:AaronsBusinessMember2021-12-310001821393aan:BrandsMartMemberaan:ReportingUnitsExcludingLeasingMember2021-12-310001821393aan:BrandsMartMemberaan:BrandsMartLeasingMember2021-12-310001821393aan:AaronsBusinessMember2022-01-012022-12-310001821393aan:BrandsMartMemberaan:BrandsMartLeasingMember2022-01-012022-12-310001821393aan:BrandsMartMemberaan:ReportingUnitsExcludingLeasingMember2022-01-012022-12-310001821393aan:AaronsBusinessMember2022-12-310001821393aan:BrandsMartMemberaan:ReportingUnitsExcludingLeasingMember2022-12-310001821393aan:BrandsMartMemberaan:BrandsMartLeasingMember2022-12-310001821393us-gaap:GoodwillMemberaan:BrandsMartLeasingMember2022-10-012022-12-310001821393aan:BrandsMartMemberaan:ReportingUnitAndOperatingSegmentMember2022-12-3100018213932022-07-012022-09-3000018213932020-01-012020-03-310001821393us-gaap:CustomerRelationshipsMember2022-12-310001821393us-gaap:CustomerRelationshipsMember2021-12-310001821393aan:ReacquiredFranchiseRightsMember2022-12-310001821393aan:ReacquiredFranchiseRightsMember2021-12-310001821393us-gaap:NoncompeteAgreementsMember2022-12-310001821393us-gaap:NoncompeteAgreementsMember2021-12-310001821393aan:CustomerLeaseContractsMember2022-12-310001821393aan:CustomerLeaseContractsMember2021-12-310001821393aan:ExpandedCustomerBaseMember2022-12-310001821393aan:ExpandedCustomerBaseMember2021-12-310001821393aan:BrandsMartTradeNameMember2022-12-310001821393aan:BrandsMartTradeNameMember2021-12-310001821393aan:BrandsMartCustomerListMember2022-12-310001821393aan:BrandsMartCustomerListMember2021-12-310001821393us-gaap:CustomerRelationshipsMember2022-01-012022-12-310001821393us-gaap:NoncompeteAgreementsMembersrt:MinimumMember2022-01-012022-12-310001821393us-gaap:NoncompeteAgreementsMembersrt:MaximumMember2022-01-012022-12-310001821393aan:CustomerLeaseContractsMember2022-01-012022-12-310001821393aan:ExpandedCustomerBaseMembersrt:MinimumMember2022-01-012022-12-310001821393aan:ExpandedCustomerBaseMembersrt:MaximumMember2022-01-012022-12-310001821393us-gaap:FranchiseRightsMembersrt:MaximumMember2022-01-012022-12-310001821393aan:BrandsMartTradeNameMember2022-01-012022-12-310001821393aan:BrandsMartCustomerListMember2022-01-012022-12-310001821393us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001821393us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-12-310001821393us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-12-310001821393us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001821393us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-12-310001821393us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310001821393us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel1Member2022-12-310001821393us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel2Member2022-12-310001821393us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Member2022-12-310001821393us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel1Member2021-12-310001821393us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel2Member2021-12-310001821393us-gaap:FairValueMeasurementsNonrecurringMemberus-gaap:FairValueInputsLevel3Member2021-12-310001821393us-gaap:LandMember2022-12-310001821393us-gaap:LandMember2021-12-310001821393us-gaap:BuildingAndBuildingImprovementsMember2022-12-310001821393us-gaap:BuildingAndBuildingImprovementsMember2021-12-310001821393us-gaap:LeaseholdImprovementsMember2022-12-310001821393us-gaap:LeaseholdImprovementsMember2021-12-310001821393us-gaap:VehiclesMember2022-12-310001821393us-gaap:VehiclesMember2021-12-310001821393aan:FixturesandEquipmentMember2022-12-310001821393aan:FixturesandEquipmentMember2021-12-310001821393aan:InternalUseSoftwareMember2022-12-310001821393aan:InternalUseSoftwareMember2021-12-310001821393us-gaap:ConstructionInProgressMember2022-12-310001821393us-gaap:ConstructionInProgressMember2021-12-310001821393aan:LeaseRevenuesandFeesMember2022-01-012022-12-310001821393aan:LeaseRevenuesandFeesMember2021-01-012021-12-310001821393aan:LeaseRevenuesandFeesMember2020-01-012020-12-310001821393aan:FranchiseRoyaltiesAndFeesMember2022-01-012022-12-310001821393aan:FranchiseRoyaltiesAndFeesMember2021-01-012021-12-310001821393aan:FranchiseRoyaltiesAndFeesMember2020-01-012020-12-310001821393aan:OtherRevenueMember2022-01-012022-12-310001821393aan:OtherRevenueMember2021-01-012021-12-310001821393aan:OtherRevenueMember2020-01-012020-12-310001821393country:CAaan:LeaseRevenuesandFeesMember2022-01-012022-12-310001821393country:CAaan:LeaseRevenuesandFeesMember2021-01-012021-12-310001821393country:CAaan:LeaseRevenuesandFeesMember2020-01-012020-12-310001821393aan:LeasesMember2022-01-012022-12-310001821393aan:LeasesMember2021-01-012021-12-310001821393aan:LeasesMember2020-01-012020-12-31aan:renewalOption0001821393aan:SalesandLeaseOwnershipandHomeSmartMember2022-01-012022-12-310001821393aan:FranchiseRoyaltiesAndFeesMemberus-gaap:TransferredOverTimeMember2022-01-012022-12-310001821393aan:FranchiseRoyaltiesAndFeesMemberus-gaap:TransferredOverTimeMember2021-01-012021-12-310001821393aan:FranchiseRoyaltiesAndFeesMemberus-gaap:TransferredOverTimeMember2020-01-012020-12-310001821393us-gaap:VehiclesMember2022-01-012022-12-310001821393us-gaap:OperatingExpenseMember2022-01-012022-12-310001821393us-gaap:OperatingExpenseMember2021-01-012021-12-310001821393us-gaap:OperatingExpenseMember2020-01-012020-12-310001821393aan:RestructuringExpensesMember2022-01-012022-12-310001821393aan:RestructuringExpensesMember2021-01-012021-12-310001821393aan:RestructuringExpensesMember2020-01-012020-12-310001821393aan:BrandsMartMember2022-01-012022-12-310001821393aan:BrandsMartMember2022-12-310001821393srt:MinimumMember2022-12-310001821393srt:MaximumMember2022-12-310001821393us-gaap:VehiclesMember2021-01-012021-12-310001821393aan:COVID19PandemicMember2020-12-310001821393aan:COVID19PandemicMember2020-01-012020-12-31aan:sale-leasebackTransaction0001821393aan:SaleAndLeasebackTransactionsMemberaan:BrandsMartMember2022-12-310001821393us-gaap:OtherOperatingIncomeExpenseMember2022-01-012022-12-310001821393aan:BrandsMartMember2022-04-010001821393us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-12-310001821393us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2021-12-310001821393aan:TermLoanMemberus-gaap:LineOfCreditMember2022-12-310001821393aan:TermLoanMemberus-gaap:LineOfCreditMember2021-12-310001821393us-gaap:LineOfCreditMember2022-12-310001821393us-gaap:LineOfCreditMember2021-12-310001821393aan:PreviousCreditFacilityMember2022-12-310001821393aan:PreviousCreditFacilityMember2021-12-310001821393us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberus-gaap:LongTermDebtMember2022-12-310001821393us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2022-12-310001821393us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2021-12-310001821393us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2020-11-090001821393us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberaan:TermLoanMember2022-04-010001821393aan:RevolvingFacilityMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-04-010001821393srt:SubsidiariesMemberus-gaap:LetterOfCreditMember2022-04-010001821393srt:SubsidiariesMemberaan:SwinglineLoansOnCustomaryTermsMember2022-04-010001821393us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMembersrt:MinimumMember2022-04-012022-04-010001821393us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMembersrt:MaximumMember2022-04-012022-04-010001821393aan:RevolvingFacilityMemberus-gaap:RevolvingCreditFacilityMember2022-12-310001821393us-gaap:RevolvingCreditFacilityMemberaan:BrandsMartUSARevolvingFacilityMemberus-gaap:LineOfCreditMember2022-04-010001821393us-gaap:LineOfCreditMemberaan:TermLoanMember2022-12-310001821393us-gaap:LineOfCreditMembersrt:MinimumMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2022-04-012022-04-010001821393us-gaap:LineOfCreditMembersrt:MaximumMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2022-04-012022-04-010001821393us-gaap:LineOfCreditMember2022-04-012022-04-010001821393srt:ScenarioForecastMemberaan:TermLoanMember2023-01-012024-12-310001821393srt:ScenarioForecastMemberaan:TermLoanMember2025-01-012027-12-310001821393us-gaap:RevolvingCreditFacilityMemberaan:TermLoanMember2020-11-302020-11-300001821393us-gaap:UnsecuredDebtMember2020-11-272020-11-270001821393us-gaap:RevolvingCreditFacilityMemberaan:PreviousCreditFacilityMemberus-gaap:LineOfCreditMember2020-11-090001821393srt:SubsidiariesMemberus-gaap:LetterOfCreditMember2020-11-090001821393srt:SubsidiariesMemberaan:SwinglineLoansOnCustomaryTermsMember2020-11-090001821393us-gaap:RevolvingCreditFacilityMemberaan:PreviousCreditFacilityMemberus-gaap:LineOfCreditMemberus-gaap:LondonInterbankOfferedRateLiborSwapRateMembersrt:MinimumMember2020-11-092020-11-090001821393us-gaap:RevolvingCreditFacilityMemberaan:PreviousCreditFacilityMemberus-gaap:LineOfCreditMemberus-gaap:LondonInterbankOfferedRateLiborSwapRateMembersrt:MaximumMember2020-11-092020-11-090001821393aan:PreviousCreditFacilityMemberus-gaap:LineOfCreditMember2020-11-092020-11-090001821393us-gaap:RevolvingCreditFacilityMemberus-gaap:FederalFundsEffectiveSwapRateMemberaan:PreviousCreditFacilityMemberus-gaap:LineOfCreditMember2020-11-092020-11-090001821393us-gaap:RevolvingCreditFacilityMemberaan:PreviousCreditFacilityMemberus-gaap:LineOfCreditMemberus-gaap:LondonInterbankOfferedRateLIBORMember2020-11-092020-11-090001821393us-gaap:RevolvingCreditFacilityMemberaan:PreviousCreditFacilityMemberus-gaap:LineOfCreditMembersrt:MinimumMember2020-11-092020-11-090001821393us-gaap:RevolvingCreditFacilityMemberaan:PreviousCreditFacilityMemberus-gaap:LineOfCreditMembersrt:MaximumMember2020-11-092020-11-090001821393us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberaan:FranchiseLoanFacilityMember2022-04-010001821393us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberaan:PreviousFranchiseLoanFacilityMember2021-11-100001821393aan:FranchiseLoanFacilityMember2022-04-012022-04-010001821393us-gaap:LineOfCreditMemberaan:FranchiseLoanFacilityMembersrt:MinimumMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2022-04-012022-04-010001821393us-gaap:LineOfCreditMemberaan:FranchiseLoanFacilityMembersrt:MaximumMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2022-04-012022-04-010001821393us-gaap:RevolvingCreditFacilityMemberus-gaap:SubsequentEventMemberus-gaap:LineOfCreditMemberaan:FranchiseLoanFacilityMember2023-02-230001821393us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberaan:InventoryLoanPayableMember2022-12-310001821393aan:InventoryLoanPayableMember2022-01-012022-12-310001821393aan:InventoryLoanPayableMember2022-12-310001821393aan:SwingLineLoansMember2022-12-310001821393aan:ProgressiveFinanceHoldingsLLCMember2021-01-012021-12-310001821393us-gaap:DomesticCountryMember2022-12-310001821393us-gaap:StateAndLocalJurisdictionMember2022-12-310001821393us-gaap:ForeignCountryMember2022-12-310001821393us-gaap:StateAndLocalJurisdictionMember2020-12-310001821393us-gaap:InvestmentCreditMember2021-01-012021-12-310001821393us-gaap:ForeignCountryMember2021-12-310001821393us-gaap:StateAndLocalJurisdictionMember2021-12-3100018213932020-03-310001821393us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMemberaan:FranchiseLoanFacilityMember2021-11-100001821393us-gaap:SellingAndMarketingExpenseMember2022-12-310001821393aan:OperationalEfficiencyAndOptimizationRestructuringProgramMember2022-01-012022-12-310001821393us-gaap:SubsequentEventMemberaan:SeveranceChargesAndProfessionalAdvisoryFeesMemberaan:OperationalEfficiencyAndOptimizationRestructuringProgramMember2023-01-012023-01-310001821393srt:MinimumMemberaan:RealEstateRepositioningAndOptimizationRestructuringProgramMember2020-01-012020-03-310001821393srt:MaximumMemberaan:RealEstateRepositioningAndOptimizationRestructuringProgramMember2020-01-012020-03-310001821393aan:RealEstateRepositioningAndOptimizationRestructuringProgramMember2021-01-012021-12-310001821393aan:RealEstateRepositioningAndOptimizationRestructuringProgramMember2022-01-012022-12-310001821393aan:RealEstateRepositioningAndOptimizationRestructuringProgramMember2020-01-012020-12-310001821393aan:RealEstateRepositioningAndOptimizationRestructuringProgramMember2022-12-312022-12-310001821393aan:RealEstateRepositioningAndOptimizationRestructuringProgramMember2022-12-310001821393aan:RightofUseAssetImpairmentMember2022-01-012022-12-310001821393aan:RightofUseAssetImpairmentMember2021-01-012021-12-310001821393aan:RightofUseAssetImpairmentMember2020-01-012020-12-310001821393aan:OperatingLeaseChargesMember2022-01-012022-12-310001821393aan:OperatingLeaseChargesMember2021-01-012021-12-310001821393aan:OperatingLeaseChargesMember2020-01-012020-12-310001821393aan:FixedAssetsMember2022-01-012022-12-310001821393aan:FixedAssetsMember2021-01-012021-12-310001821393aan:FixedAssetsMember2020-01-012020-12-310001821393us-gaap:EmployeeSeveranceMember2022-01-012022-12-310001821393us-gaap:EmployeeSeveranceMember2021-01-012021-12-310001821393us-gaap:EmployeeSeveranceMember2020-01-012020-12-310001821393aan:SeveranceChargesAndProfessionalAdvisoryFeesMember2022-01-012022-12-310001821393aan:SeveranceChargesAndProfessionalAdvisoryFeesMember2021-01-012021-12-310001821393aan:SeveranceChargesAndProfessionalAdvisoryFeesMember2020-01-012020-12-310001821393aan:OtherReversalsExpensesMember2022-01-012022-12-310001821393aan:OtherReversalsExpensesMember2021-01-012021-12-310001821393aan:OtherReversalsExpensesMember2020-01-012020-12-310001821393aan:LossGainOnSaleOfStoreRelatedPropertiesAndAssetsMember2022-01-012022-12-310001821393aan:LossGainOnSaleOfStoreRelatedPropertiesAndAssetsMember2021-01-012021-12-310001821393aan:LossGainOnSaleOfStoreRelatedPropertiesAndAssetsMember2020-01-012020-12-310001821393aan:OperatingLeaseChargesMemberaan:RealEstateSettlementMember2022-01-012022-12-310001821393us-gaap:EmployeeSeveranceMember2021-12-310001821393aan:OperatingLeaseChargesMember2021-12-310001821393aan:SeveranceChargesAndProfessionalAdvisoryFeesMember2021-12-310001821393us-gaap:EmployeeSeveranceMember2022-12-310001821393aan:OperatingLeaseChargesMember2022-12-310001821393aan:SeveranceChargesAndProfessionalAdvisoryFeesMember2022-12-310001821393aan:BrandsMartMember2022-01-012022-03-310001821393aan:BrandsMartMember2022-04-012022-12-310001821393aan:BrandsMartMember2022-12-310001821393us-gaap:OperatingSegmentsMemberaan:LeaseRevenuesandFeesMemberaan:AaronsBusinessMember2022-01-012022-12-310001821393aan:BrandsMartMemberus-gaap:OperatingSegmentsMemberaan:LeaseRevenuesandFeesMember2022-01-012022-12-310001821393aan:LeaseRevenuesandFeesMemberus-gaap:IntersegmentEliminationMember2022-01-012022-12-310001821393aan:RetailSalesMemberus-gaap:OperatingSegmentsMemberaan:AaronsBusinessMember2022-01-012022-12-310001821393aan:RetailSalesMemberaan:BrandsMartMemberus-gaap:OperatingSegmentsMember2022-01-012022-12-310001821393aan:RetailSalesMemberus-gaap:IntersegmentEliminationMember2022-01-012022-12-310001821393aan:NonRetailSalesMemberus-gaap:OperatingSegmentsMemberaan:AaronsBusinessMember2022-01-012022-12-310001821393aan:NonRetailSalesMemberaan:BrandsMartMemberus-gaap:OperatingSegmentsMember2022-01-012022-12-310001821393aan:NonRetailSalesMemberus-gaap:IntersegmentEliminationMember2022-01-012022-12-310001821393us-gaap:OperatingSegmentsMemberaan:FranchiseRoyaltiesAndFeesMemberaan:AaronsBusinessMember2022-01-012022-12-310001821393aan:BrandsMartMemberus-gaap:OperatingSegmentsMemberaan:FranchiseRoyaltiesAndFeesMember2022-01-012022-12-310001821393aan:FranchiseRoyaltiesAndFeesMemberus-gaap:IntersegmentEliminationMember2022-01-012022-12-310001821393us-gaap:OperatingSegmentsMemberaan:AaronsBusinessMemberaan:OtherRevenueMember2022-01-012022-12-310001821393aan:BrandsMartMemberus-gaap:OperatingSegmentsMemberaan:OtherRevenueMember2022-01-012022-12-310001821393us-gaap:IntersegmentEliminationMemberaan:OtherRevenueMember2022-01-012022-12-310001821393us-gaap:OperatingSegmentsMemberaan:AaronsBusinessMember2022-01-012022-12-310001821393aan:BrandsMartMemberus-gaap:OperatingSegmentsMember2022-01-012022-12-310001821393us-gaap:IntersegmentEliminationMember2022-01-012022-12-310001821393us-gaap:CorporateNonSegmentMember2022-01-012022-12-310001821393aan:BrandsMartMemberus-gaap:OperatingSegmentsMember2022-10-012022-12-310001821393aan:BrandsMartMember2022-01-012022-12-310001821393aan:AaronsBusinessMember2022-01-012022-12-310001821393us-gaap:OperatingSegmentsMemberaan:LeaseRevenuesandFeesMemberaan:AaronsBusinessMember2021-01-012021-12-310001821393aan:BrandsMartMemberus-gaap:OperatingSegmentsMemberaan:LeaseRevenuesandFeesMember2021-01-012021-12-310001821393aan:LeaseRevenuesandFeesMemberus-gaap:IntersegmentEliminationMember2021-01-012021-12-310001821393aan:RetailSalesMemberus-gaap:OperatingSegmentsMemberaan:AaronsBusinessMember2021-01-012021-12-310001821393aan:RetailSalesMemberaan:BrandsMartMemberus-gaap:OperatingSegmentsMember2021-01-012021-12-310001821393aan:RetailSalesMemberus-gaap:IntersegmentEliminationMember2021-01-012021-12-310001821393aan:NonRetailSalesMemberus-gaap:OperatingSegmentsMemberaan:AaronsBusinessMember2021-01-012021-12-310001821393aan:NonRetailSalesMemberaan:BrandsMartMemberus-gaap:OperatingSegmentsMember2021-01-012021-12-310001821393aan:NonRetailSalesMemberus-gaap:IntersegmentEliminationMember2021-01-012021-12-310001821393us-gaap:OperatingSegmentsMemberaan:FranchiseRoyaltiesAndFeesMemberaan:AaronsBusinessMember2021-01-012021-12-310001821393aan:BrandsMartMemberus-gaap:OperatingSegmentsMemberaan:FranchiseRoyaltiesAndFeesMember2021-01-012021-12-310001821393aan:FranchiseRoyaltiesAndFeesMemberus-gaap:IntersegmentEliminationMember2021-01-012021-12-310001821393us-gaap:OperatingSegmentsMemberaan:AaronsBusinessMemberaan:OtherRevenueMember2021-01-012021-12-310001821393aan:BrandsMartMemberus-gaap:OperatingSegmentsMemberaan:OtherRevenueMember2021-01-012021-12-310001821393us-gaap:IntersegmentEliminationMemberaan:OtherRevenueMember2021-01-012021-12-310001821393us-gaap:OperatingSegmentsMemberaan:AaronsBusinessMember2021-01-012021-12-310001821393aan:BrandsMartMemberus-gaap:OperatingSegmentsMember2021-01-012021-12-310001821393us-gaap:IntersegmentEliminationMember2021-01-012021-12-310001821393us-gaap:CorporateNonSegmentMember2021-01-012021-12-310001821393us-gaap:OperatingSegmentsMemberaan:LeaseRevenuesandFeesMemberaan:AaronsBusinessMember2020-01-012020-12-310001821393aan:BrandsMartMemberus-gaap:OperatingSegmentsMemberaan:LeaseRevenuesandFeesMember2020-01-012020-12-310001821393aan:LeaseRevenuesandFeesMemberus-gaap:IntersegmentEliminationMember2020-01-012020-12-310001821393aan:RetailSalesMemberus-gaap:OperatingSegmentsMemberaan:AaronsBusinessMember2020-01-012020-12-310001821393aan:RetailSalesMemberaan:BrandsMartMemberus-gaap:OperatingSegmentsMember2020-01-012020-12-310001821393aan:RetailSalesMemberus-gaap:IntersegmentEliminationMember2020-01-012020-12-310001821393aan:NonRetailSalesMemberus-gaap:OperatingSegmentsMemberaan:AaronsBusinessMember2020-01-012020-12-310001821393aan:NonRetailSalesMemberaan:BrandsMartMemberus-gaap:OperatingSegmentsMember2020-01-012020-12-310001821393aan:NonRetailSalesMemberus-gaap:IntersegmentEliminationMember2020-01-012020-12-310001821393us-gaap:OperatingSegmentsMemberaan:FranchiseRoyaltiesAndFeesMemberaan:AaronsBusinessMember2020-01-012020-12-310001821393aan:BrandsMartMemberus-gaap:OperatingSegmentsMemberaan:FranchiseRoyaltiesAndFeesMember2020-01-012020-12-310001821393aan:FranchiseRoyaltiesAndFeesMemberus-gaap:IntersegmentEliminationMember2020-01-012020-12-310001821393us-gaap:OperatingSegmentsMemberaan:AaronsBusinessMemberaan:OtherRevenueMember2020-01-012020-12-310001821393aan:BrandsMartMemberus-gaap:OperatingSegmentsMemberaan:OtherRevenueMember2020-01-012020-12-310001821393us-gaap:IntersegmentEliminationMemberaan:OtherRevenueMember2020-01-012020-12-310001821393us-gaap:OperatingSegmentsMemberaan:AaronsBusinessMember2020-01-012020-12-310001821393aan:BrandsMartMemberus-gaap:OperatingSegmentsMember2020-01-012020-12-310001821393us-gaap:IntersegmentEliminationMember2020-01-012020-12-310001821393us-gaap:CorporateNonSegmentMember2020-01-012020-12-310001821393aan:EmployeeMattersAgreementMember2020-11-300001821393aan:EmployeeMattersAgreementMember2022-01-012022-12-310001821393aan:EmployeeMattersAgreementMember2020-12-310001821393aan:EmployeeMattersAgreementMember2021-12-310001821393aan:EmployeeMattersAgreementMember2022-12-310001821393aan:RetirementRelatedModificationsMemberus-gaap:RestrictedStockMember2021-01-012021-12-310001821393us-gaap:PerformanceSharesMemberaan:RetirementRelatedModificationsMember2021-01-012021-12-310001821393aan:StockOptionsMemberaan:RetirementRelatedModificationsMember2021-01-012021-12-310001821393us-gaap:EmployeeStockMember2022-12-310001821393us-gaap:EmployeeStockMember2022-01-012022-12-310001821393aan:A2015IncentiveAwardPlanMembersrt:MinimumMemberus-gaap:EmployeeStockMember2020-01-012020-12-310001821393aan:A2015IncentiveAwardPlanMembersrt:MaximumMemberus-gaap:EmployeeStockMember2020-01-012020-12-310001821393aan:A2015IncentiveAwardPlanMember2020-01-012020-12-310001821393aan:StockOptionsMember2022-01-012022-12-310001821393aan:StockOptionsMember2021-01-012021-12-310001821393aan:StockOptionsMember2021-12-310001821393aan:StockOptionsMember2022-12-3100018213932020-11-302020-12-310001821393aan:OptionsExercisedPriorTo11302020Member2020-01-012020-12-310001821393aan:RangeOneMember2022-01-012022-12-310001821393aan:RangeOneMember2022-12-310001821393aan:RangeTwoMember2022-01-012022-12-310001821393aan:RangeTwoMember2022-12-310001821393aan:RangeThreeMember2022-01-012022-12-310001821393aan:RangeThreeMember2022-12-310001821393aan:RangeSixMember2022-01-012022-12-310001821393aan:RangeSixMember2022-12-310001821393aan:A2015IncentiveAwardPlanMembersrt:MinimumMemberus-gaap:RestrictedStockMember2022-01-012022-12-310001821393aan:A2015IncentiveAwardPlanMembersrt:MaximumMemberus-gaap:RestrictedStockMember2022-01-012022-12-310001821393us-gaap:RestrictedStockMember2022-01-012022-12-310001821393us-gaap:RestrictedStockMember2021-01-012021-12-310001821393us-gaap:RestrictedStockMember2021-12-310001821393us-gaap:RestrictedStockMember2022-12-310001821393us-gaap:RestrictedStockMember2020-11-302020-12-310001821393us-gaap:RestrictedStockMember2020-01-012020-12-310001821393us-gaap:ShareBasedCompensationAwardTrancheTwoMemberus-gaap:PerformanceSharesMember2022-01-012022-12-310001821393us-gaap:ShareBasedCompensationAwardTrancheThreeMemberus-gaap:PerformanceSharesMember2022-01-012022-12-310001821393us-gaap:PerformanceSharesMember2022-01-012022-12-310001821393us-gaap:PerformanceSharesMembersrt:MinimumMember2022-01-012022-12-310001821393us-gaap:PerformanceSharesMembersrt:MaximumMember2022-01-012022-12-310001821393us-gaap:PerformanceSharesMember2021-01-012021-12-310001821393us-gaap:PerformanceSharesMember2021-12-310001821393us-gaap:PerformanceSharesMember2022-12-310001821393us-gaap:PerformanceSharesMember2020-11-302020-12-310001821393us-gaap:PerformanceSharesMember2020-01-012020-12-310001821393us-gaap:EmployeeStockMember2020-01-012020-12-310001821393us-gaap:EmployeeStockMember2021-01-012021-12-310001821393us-gaap:PerformanceSharesMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2022-01-012022-12-310001821393aan:EmployeeMember2022-01-012022-12-310001821393aan:NonEmployeeDirectorMember2022-01-012022-12-310001821393us-gaap:ShareBasedCompensationAwardTrancheOneMemberus-gaap:NonqualifiedPlanMemberaan:EmployeeMember2022-01-012022-12-310001821393us-gaap:ShareBasedCompensationAwardTrancheTwoMemberus-gaap:NonqualifiedPlanMemberaan:EmployeeMember2022-01-012022-12-310001821393us-gaap:NonqualifiedPlanMemberaan:EmployeeMember2022-01-012022-12-310001821393us-gaap:UnfundedPlanMemberus-gaap:NonqualifiedPlanMemberaan:EmployeeMember2020-01-012020-12-310001821393us-gaap:UnfundedPlanMemberus-gaap:NonqualifiedPlanMemberaan:EmployeeMember2021-01-012021-12-310001821393us-gaap:UnfundedPlanMemberus-gaap:NonqualifiedPlanMemberaan:EmployeeMember2022-01-012022-12-310001821393aan:PROGHoldingsIncMember2020-01-012020-12-3100018213932022-01-012022-03-3100018213932022-04-012022-06-3000018213932021-01-012021-03-3100018213932021-04-012021-06-3000018213932021-07-012021-09-3000018213932021-10-012021-12-310001821393aan:BrandsMartMember2022-02-230001821393aan:BrandsMartMember2022-02-232022-02-230001821393aan:TermLoanMember2022-02-230001821393aan:TermLoanMember2022-02-232022-02-230001821393aan:TermLoanMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2022-02-232022-02-23

☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from                  to                 

Georgia

85-2483376

(State or other jurisdiction of incorporation or organization)

(I. R. S. Employer Identification No.)

400 Galleria Parkway SE

Suite 300

Atlanta

Georgia

30339-3182

(Address of principal executive offices)

(Zip Code)

Title of each class			Trading Symbol			Name of each exchange on which registered
Common Stock, $0.50 Par Value			AAN			New York Stock Exchange

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issues financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Large Accelerated Filer

☐

Accelerated Filer

ý

Non-Accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

ý

PART I			5
ITEM 1. BUSINESS			5
ITEM 1A. RISK FACTORS			21
ITEM 1B. UNRESOLVED STAFF COMMENTS			38
ITEM 2. PROPERTIES			39
ITEM 3. LEGAL PROCEEDINGS			40
ITEM 4. MINE SAFETY DISCLOSURES			40
PART II			41
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES			41
ITEM 6. [RESERVED]			43
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			44
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			66
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA			67
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE			127
ITEM 9A. CONTROLS AND PROCEDURES			127
ITEM 9B. OTHER INFORMATION			127
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS			127
PART III			128
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS OF THE REGISTRANT AND CORPORATE GOVERNANCE			128
ITEM 11. EXECUTIVE COMPENSATION			128
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS			128
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE			128
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES			128
PART IV			129
ITEM 15. EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES			129
ITEM 16. FORM 10-K SUMMARY			132
SIGNATURES			133

•changes in the enforcement of existing laws and regulations and the adoption of new laws and regulations that may unfavorably impact our business, and failures to comply with existing or new laws or regulations, including those related to consumer protection, as well as an increased focus on our industry by federal and state regulatory authorities;

•our new strategic plan failing to deliver the benefits and outcomes we expect, with respect to improving our business in particular, including components of that plan related to centralizing key processes, such as customer lease decisioning and payments, real estate optimization, enhancing our e-commerce platform and digital acquisition channels, enhancing and growing BrandsMart, and optimizing cost structure;

•our ability to attract and retain key personnel;

•cybersecurity breaches, disruptions or failures in our information technology ("IT") systems and our failure to protect the security of personal information about our customers;

•weakening general market and economic conditions, especially as they may affect retail sales, increased interest rates, unemployment and consumer confidence or spending levels;

•the current inflationary environment could result in increased labor, raw materials or logistics costs that we are unable to offset or accelerating prices that result in lower lease volumes;

•supply chain delays and disruptions, including adverse consequences to our supply chain function from decreased procurement volumes and from the COVID-19 pandemic, and the availability and prices of supply chain resources, including products and transportation;

•risks associated with the challenges faced by our business, including commoditization of consumer electronics, our high fixed-cost operating model and the ongoing labor shortage;

•increased competition from direct-to-consumer and virtual lease-to-own competitors, as well as from traditional and on-line retailers and other competitors;

•financial challenges faced by our franchisees, which could be exacerbated in future periods by the COVID-19 pandemic and its unfavorable impacts on unemployment, inflation, and other economic factors, and/or by related governmental or regulatory measures to combat the pandemic;

•increases in lease merchandise write-offs;

•the risk that the Company may fail to realize the benefits expected from the acquisition of Interbond Corporation of America, doing business as BrandsMart U.S.A., including projected synergies;

•the risk that the acquisition of BrandsMart U.S.A. may create risks and uncertainties which could materially and adversely affect our business and results of operations;

•our ability to successfully acquire and integrate businesses and to realize the projected results and expected benefits of acquisitions or strategic transactions;

•our ability to maintain or improve market share in the categories in which we operate despite heightened competitive pressure;

•our ability to improve operations and realize cost savings;

•any ongoing impact of the COVID-19 pandemic, or any future potential pandemics, as well as related measures taken by governmental or regulatory authorities to combat the pandemic;

•our ability to access capital markets or raise capital, if needed;

•our ability to protect our intellectual property and other material proprietary rights;

•changes in our services or products;

•negative reputational and financial impacts resulting from future acquisitions or strategic transactions;

•restrictions contained in our debt agreements;

•business disruptions due to political or economic instability due to the ongoing conflict between Russia and Ukraine; and

•other factors described in this Annual Report and from time to time in documents that we file with the SEC.

Stores as of December 31 (Unaudited)			2022						2021						2020
Company-operated Aaron's Stores1			1,034						1,074						1,092
Franchisee-operated Aaron's Stores			232						236						248
BrandsMart U.S.A. Stores2			10						—						—
Systemwide Stores			1,276						1,310						1,340

1 The typical layout for a Company-operated Aaron's store is a combination of showroom, customer service and warehouse space, generally comprising 6,000 to 15,000 square feet. Certain Company-operated Aaron's stores consist solely of a showroom.

2 BrandsMart U.S.A. stores average approximately 100,000 square feet and have been included in this table subsequent to the acquisition date of April 1, 2022.

•Transform the Aaron's Business

•Align the Aaron's Store Footprint to our Customer Opportunity – We continue to invest in our market strategy capabilities to make better-informed, evidence-driven decisions around store location and the optimization of operating expenses. We regularly review our Aaron's real estate portfolio, which we expect will increase profitability through repositioning, remodeling, and consolidating our existing stores via our next-generation store concept ("GenNext"). The GenNext store concept features include larger showrooms and/or re-engineered store layouts, updated signage, expanded product assortment, enhanced technology-enabled shopping and checkout, and an innovative operating model. We've also enhanced our market optimization strategy with a new "Hub and Showroom" model which leverages existing infrastructure to more efficiently serve markets by combining servicing capabilities of multiple stores into a "hub" store while converting other nearby stores into "showrooms" that focus on sales activities.

•Promote our Value Proposition to Retain and Attract New Customers to our Brand – We continue to invest in e-commerce, innovative marketing campaigns, and our lease decisioning and digital platforms to illustrate our value proposition to new and existing customers. Such initiatives and investments include:

◦Making investments to drive growth and consumer traffic through our e-commerce customer acquisition channel by investing in enhancements that provide a fully transactional, mobile, and seamless shopping experience that includes broader product selections, all of which are intended to attract newer and younger customers.

◦Utilizing a broad spectrum of traditional and digital bilingual marketing communications, ranging from direct mail, social media, display, and local market media, all allowing us to customize messages around price, value, and payment flexibility. The Company is also increasing its local marketing and promotional focus on weekly payment offerings to attract more customers and gain market share.

◦Continuing investments in lease decisioning and other digital platforms that allow us to optimize lease portfolio performance through analytics and machine learning. Other digital investments, aimed at enhancing the customer's experience include digital payment and servicing platforms.

•Enhance and Grow BrandsMart

•Achieve Transaction Synergies - We continue to make progress in executing our synergy initiatives in connection with the acquisition of BrandsMart U.S.A. in order to drive meaningful value-creation opportunities for the Company. These initiatives include:

◦The deployment of a new "in-house" lease-to-own solution which is now available at BrandsMart's stores ("BrandsMart Leasing"),

◦Offering a wide selection of BrandsMart's product assortment to Aaron's customers through the aarons.com e-commerce platform, and

◦Leveraging complementary purchasing capabilities and increased scale to generate direct procurement savings across both businesses.

•Grow Addressable Market - The acquisition of BrandsMart U.S.A. broadens our customer reach and significantly expands our total addressable market. Our BrandsMart growth initiatives include:

◦Capturing share in adjacent geographic markets by opening new BrandsMart stores. Over the next three years, we expect to open 1-2 new stores per year starting in 2023, and one new outlet center by the end of 2025.

◦Making investments to drive growth and consumer traffic through our e-commerce customer acquisition channel by investing in enhancements to the online shopping experience through website redesign, expanded product selection, and enhanced digital marketing strategies that drive customer traffic.

•Enterprise Initiatives

•Strengthen Operational Efficiencies and Optimize Cost Structure - During the third quarter of 2022, the Company initiated an operational efficiency and optimization restructuring program intended to reduce the Company’s overall costs. This program includes the expansion of the hub and showroom model to optimize labor in markets, store labor realignments, optimization of the Company's supply chain, the centralization and optimization of store support center, operations, and multi-unit store oversight functions, as well as other reductions in real estate and third party spend. Management believes that implementing this program will help the Company sharpen its operational focus, optimize its cost profile, allocate capital resources towards long-term strategic objectives, and generate incremental value for shareholders.

•Further environmental, social, and governance initiatives ("ESG") – We continue to invest in building a people-focused workplace culture and in opportunities to make a positive impact on the environment and the communities where our customers and team members live and work. To do this, we continue to enhance our compliance, enterprise risk management, corporate governance, diversity and inclusion, and environmental

•Our Aaron's brand and physical presence in over 650 markets – With nearly 70 years in business, Aaron's is recognized nationwide as a leader in the LTO marketplace. This brand recognition has led to an approximate 64% repeat customer rate for the new leases we enter into, and as of December 31, 2022, our Company-operated and franchised stores had approximately 1.0 million customers with active leases. We believe that having delivery trucks located throughout our network enables us to successfully serve diverse markets including rural, suburban, and urban markets, helping mitigate the impact of local economic disruptions resulting from specific industry economic cycles, weather, and other disruptive events.

•Industry leading technology and analytics at the Aaron's Business – The Company has invested in technology to improve the customer experience and its operational execution. These investments include platforms for enhanced data analytics, data-enabled lease decisioning, digital customer onboarding, centralized payment processing and an e-commerce website that allows the customer to review and select merchandise, complete the lease application and, if approved, complete the LTO agreement and make lease payments on-line. Our technology-enabled platforms simplify the transaction and provide customers with enhanced transparency and flexibility throughout their lease, and provide management with information needed to optimize the financial performance of the business.

•BrandsMart U.S.A.'s competitive pricing and strong brand recognition – BrandsMart U.S.A.'s best in class pricing, broad product assortment and strong storefront presence and brand awareness within the Florida and Georgia markets positions the brand to thrive among its competitors.

•Management teams with deep industry experience and customer relationships – The Company's Aaron's branded stores are managed by a group of tenured managers and multi-unit leaders who have deep knowledge of the LTO transaction, as well as experience with our overlooked and underserved customer base. Our high levels of customer service within the Aaron's Business are enhanced by years of relationship building and LTO industry experience that is hard to replicate. Our average management tenure for the Aaron's Business operations is as follows: 8 years for store managers; 11 years for regional managers; 18 years for divisional vice presidents; and 24 years for our Chief Store Operations Officer. The Company's BrandsMart stores are managed by a group of tenured managers who have deep knowledge of retail operations. Our average management tenure for the BrandsMart operations is as follows: 26 years for general managers; 20 years for store managers; and 27 years for vice presidents of key functional areas.

•Last-mile, reverse logistics and refurbishment capabilities – Through both the Aaron's and BrandsMart businesses we are able to offer our customers prompt delivery, in-home set-up, product repair or replacement services, and reverse logistics (with respect to the Aaron's business) for the products our customers obtain from us. Our Aaron's stores also

•In-house upholstered furniture manufacturing – Under our Woodhaven Furniture Industries ("Woodhaven") manufacturing division, we have the capacity to manufacture approximately 1.1 million furniture units per year, utilizing over 738,000 square feet of manufacturing capacity in five primary furniture facilities. In-house manufacturing provides control over quality and construction, fast response to changing customer tastes and market trends, reduced inventory fulfillment lead times, and mitigation of inventory supply disruptions.

			Year Ended December 31,
Aaron's Business Merchandise Category			2022						2021						2020
Furniture			41		%				43		%				44		%
Appliances			31		%				31		%				29		%
Consumer Electronics			25		%				23		%				24		%
Other			3		%				3		%				3		%

			Year Ended December 31,
BrandsMart Merchandise Category			2022
Appliances			55		%
Consumer Electronics			35		%
Other			10		%

			Year Ended December 31, 2022
			Male						Female						Undisclosed
Total Workforce			66.4		%				32.4		%				1.2		%
Management			71.2		%				28.7		%				0.1		%

			Year Ended December 31, 2022
			Hispanic or Latino			White			Black or African American			Native Hawaiian or Pacific Islander						Asian						American Indian or Alaskan Native			Two or More Races			Undisclosed
Total Workforce			19.6		%	34.0		%	28.1		%	0.3		%				0.9		%				0.8		%	2.1		%	14.2		%
Management			14.5		%	46.0		%	17.2		%	0.3		%				1.1		%				0.6		%	1.3		%	19.0		%

			Year Ended December 31, 2022
			Baby Boomer1			Gen-X2			Millennial3			Post Millennial/Gen-Z4
Total Workforce			8.5		%	28.1		%	45.8		%	17.6		%
Management			9.6		%	49.4		%	39.2		%	1.8		%

1 Born between 1946 – 1964 (i.e., Baby Boomer)

2 Born between 1965 – 1980 (i.e., Gen X)

3 Born between 1981 – 1996 (i.e., Millennial)

4 Born in 1997 or later (i.e., Post Millennial/Gen Z)

•Delivering on our Diversity and Inclusion vision, designed with the support and guidance of a strategic consulting firm, through our Diversity and Inclusion strategic priorities that include:

◦Developing, retaining, and attracting team members from diverse backgrounds;

◦Fostering a supportive environment that builds trust and makes team members feel comfortable;

◦Actively listening to the voice of team members to champion the best ideas; and

◦Enhancing communication channels to facilitate collaboration and promote transparency;

•Responding to Aaron's Business team member sentiments regarding Diversity and Inclusion gathered through an all-employee voluntary and anonymous survey, available to more than 9,000 Aaron's Business team members, one-on-one interviews and focus groups, and leadership culture sessions to inform future Diversity and Inclusion planning and programming, which resulted in actions that included, but were not limited to, adding two new Employee Business Resource Groups ("EBRGs") in 2022 with the creation of Aaron’s Veterans and Allies and Aaron’s Disability Education Collective;

•Successfully filling our newly created Diversity and Inclusion role focused on advancing the Company's Diversity and Inclusion vision and strategic priorities;

•Providing our full-time Aaron’s Business team members with a floating holiday that provides one additional day of leave time to celebrate a day that is special to them;

•Connecting an incentive compensation goal in the Aaron's Annual Incentive Plan (AIP) to the completion of two or more hours of curated Diversity and Inclusion related content by each eligible team member through our third-party learning content platform, resulting in more than 785 hours of Diversity and Inclusion content consumed by this AIP eligible population;

•Providing in-person unconscious bias training through a Diversity and Inclusion expert to all Aaron's Business Vice Presidents and above and incorporating this training as a component of the executive incentive compensation plan;

•Providing access to unconscious bias training for all people leaders across the Aaron's Business through an e-learning platform;

•Providing executive sponsorship, monetary, and other support to each of the Aaron's Business EBRGs, each of which allow a safe space for traditionally underrepresented team members and their allies to connect and discuss experiences, provide educational and motivational events, enable mentorship opportunities for team members, provide professional development opportunities, and support the Company’s objectives related to developing team members and creating diversity awareness. Our active EBRGs include:

•Aaron's Women's Leadership Network (AWLN), whose mission is to connect team members who want to attract, develop, and advance talented women leaders at Aaron’s;

•Aaron's Black Leadership Exchange (ABLE), whose mission is to exchange information and ideas that create a path for personal and professional development of Black team members while strengthening our connection with our customers and community;

•Aaron's Pride Alliance (PRIDE), whose mission is to increase awareness, inclusion and wellbeing of lesbian, gay, bisexual, transgender, and questioning team members at Aaron’s, and to provide resources for community members and allies;

•Inspiring Growth and Unity at Aaron's for Latinos/Hispanics (IGUAL), whose mission is to create a foundation that empowers Latinos at Aaron’s by advocating for the betterment of the Latino community, both internally and externally, with various areas of focus such as business transformation, engagement, growth and leadership development within the organization;

•Aaron's Veterans and Allies (AVA), whose mission is to connect veterans and allies within Aaron’s for the purpose of providing support and education, engaging the communities we serve, and fostering personal and professional development through mentorships and access to resources; and

•Aaron's Disability Education Collective (ADEC), whose mission is to connect disabled team members and their allies within Aaron’s to provide support, education, and tools for interactions with the disabled community, engage with the communities we serve to support and advocate for the disabled community, and support disabled team members with both personal and professional growth opportunities;

•Engaging the Aaron's Business Diversity and Inclusion Council, which includes leaders from multiple functional areas and executive leadership, to provide management with support and oversight to our EBRGs;

•Celebrating cultural events for our Aaron's Business team members led by our EBRGs, including, but not limited to, Black History Month, Women's History Month, National Hispanic Heritage Month, Pride Month, Día de los Muertos, Juneteenth, International Day of Tolerance, International Women's Day, Martin Luther King, Jr. Day, Veteran's Day, National Disability Independence Day, BIPOC Mental Health Awareness Month, Family and Caregivers Month, and National Crown Day;

•Providing more inclusive ways for Aaron's Business team members to self-identify from a gender identity perspective;

•Utilizing diversity job boards to advertise job opportunities within the Aaron's Business;

•Participating in the Metro Atlanta Chamber's ATL Action for Racial Equity; and

•Conducting a talent review process designed to utilize a multi-factor approach to understand the talents of our Aaron's Business field leadership team members and their potential to become future Company leaders.

•Providing all Aaron’s Business store support center team members and all Aaron's Business management access to a library of more than 16,000 third-party courses enabling the development of new skills that contribute to career growth and development. Team members consumed more than 5,300 hours of learning via this third-party platform in 2022. In addition, this learning content is scanned and reviewed internally, leading to targeted library content that focuses on topics and content areas determined to be of greatest relevance and importance to the organization;

•Delivering an in-house designed continuous learning program to avail Aaron's store team members a career path with the destination of their choosing while using custom learning solutions designed to add and confirm both competencies and proficiencies throughout all levels of their career. The learning takes a blended approach involving formal courses, self-directed learning, and on-the-job applications. In addition, the curriculum features internal experts educating and coaching others;

•Coordinating and deploying training to our management-level team members in 2022, including compliance, ethics and leadership training;

•Providing team members with recurring training on critical issues such as safety and security, compliance, ethics and integrity, and information security;

•Gathering engagement feedback from our team members on a regular basis and responding to that feedback in a variety of ways including personal, one-on-one interactions, team meetings, leadership communications, and town hall meetings with team members, led by senior executives;

•Offering health, dental, and vision benefits for all eligible team members, including our eligible hourly store-based, fulfillment center, manufacturing, and call-center team members;

•Matching team members’ 401(k) plan contributions of up to 5% of eligible pay after one year of service;

•Providing paid time off (including volunteer activities in the community for eligible team members);

•Providing employee discounts for merchandise purchased;

•Providing confidential counseling for Aaron's Business team members through our Employee Assistance Program ("EAP");

•Providing a comprehensive suite of wellbeing offerings, including unlimited health coaching sessions, unlimited financial coaching sessions with a certified financial planner, and emotional support through our EAP counseling sessions and unlimited behavioral health coaching sessions via text, at no cost to our Aaron's Business team members;

•Providing paid parental leave to eligible Aaron's Business team members – maternity, paternity and adoption;

•Offering a tuition reimbursement program that provides eligible Aaron’s Business team members up to $3,000 per year (increased from $1,500 in prior years) for courses related to current or future roles at the Company; and

•Offering an employee stock purchase program for eligible Aaron's Business team members with a lookback and discount.

•Dedicated health & safety team providing program oversight and continued maturation efforts;

•Required annual and new hire formal safety training curriculum;

•Environmental, Health & Safety Audit Program for our fulfillment centers, service centers and manufacturing operations;

•Three lines of defense for safety auditing and checklist at Company operated retail stores;

•Driver qualification program;

•Continued investment in equipment and technology to provide our team members with the safest experience;

•Reporting on safety Key Performance Indicators to field and senior management regularly; and

•Oversight and governance by our Safety Committee made up of key executives and other members of management.

All of our team members earn more than the federal minimum wage. The average hourly wage of a full-time hourly operations employee in our Company-operated stores, fulfillment and service centers, and divisional support staff, as of December 31, 2022, is $15.65, with a meaningful portion of those team members earning an average hourly wage of $16.50 or more. The average total compensation and benefits for a full-time hourly operations employee in our Company-operated stores, fulfillment -and service centers, and divisional support staff is approximately $35,000 including wages, bonuses and benefits, such as paid time off. Also, more than 97% of our Company-operated stores, fulfillment and service center, and divisional support staff team members are eligible to earn an incentive payment which allows us to meaningfully reward our high performing team members.

The Company respects the rights of workers who offer services and create the products that we purchase from our suppliers. We communicate our expectations to provide us with safe, energy-efficient, high-quality products, and we hold our suppliers to a high standard because we strive to be an example of good human rights and labor practices throughout our business activities. We take care in the selection of our suppliers, and Aaron's also communicates its expectations on social conditions, worker safety and integrity in the workplace, and compliance with applicable laws through Aaron's Supplier Code of Conduct. The Supplier Code of Conduct outlines Aaron's expectations with respect to hiring practices, forced labor, child labor, discrimination, and other labor rights. Aaron's suppliers must comply with the Supplier Code of Conduct, conduct their business with a high level of integrity, and maintain accurate records to demonstrate that compliance. Specifically, Aaron's requires its suppliers, in accordance with applicable laws, to meet the following standards per the Supplier Code of Conduct and standard terms and conditions:

•Treat all workers with dignity and respect;

•Provide a safe, healthy, and clean work environment;

•Provide safe and healthy housing if supplier provides residential housing for its team members;

•Provide a discrimination, harassment, and punishment free environment;

•Pay workers at least the minimum wage and benefits required;

•Follow minimum working hour restrictions;

•Prohibit child labor, forced labor and human trafficking; and

•Comply with applicable laws (including any changes from time to time).

We make available free of charge on our Internet website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports and the Proxy Statement for our Annual Meeting of Shareholders. Our Internet address is www.aarons.com.

•Federal and state regulatory authorities are increasingly focused on our industry, and in addition to being subject to various existing federal, state and provincial laws and regulations, we may be subject to new or additional federal, state and provincial laws and regulations (or changes in interpretations of existing laws and regulations) that could expose us to government investigations, pricing restrictions, fines, penalties or other government-required payments by us, significant additional costs or compliance-related burdens that could force us to change our business practices in a manner that may have a material adverse effect on our business, results of operations or financial condition.

•From time to time we are subject to regulatory and legal proceedings which seek material damages or seek to place significant restrictions on our business operations. These proceedings may be negatively perceived by the public and materially and adversely affect our business, liquidity and capital resources.

•Certain judicial or regulatory decisions may restrict or eliminate the enforceability of certain types of contractual provisions, such as mandatory arbitration clauses and class action waivers, designed to limit costly litigation, as a dispute resolution method, which could have a material adverse effect on our business.

•Product safety and quality control issues, including product recalls, could harm our reputation, divert resources, reduce sales and increase costs.

•The current inflationary environment could adversely impact our business through increased costs to attract and retain talent, increased raw materials costs, increased logistical costs to get product from suppliers to customer’s homes and the acceleration of prices beyond the norm resulting in lower lease volumes.

•We depend on hiring an adequate number of hourly team members to run our business and are subject to government laws and regulations concerning these and our other team members, including wage and hour regulations. Our inability to recruit, select, train and retain qualified team members or violations by us of employment or wage and hour laws or regulations could have a material adverse effect on our business, results of operations or financial condition.

•The loss of the services of our key executives, or our inability to attract, develop and retain key talent could have a material adverse effect on our business and operations.

•If we do not maintain the privacy and security of customer, employee or other confidential information, due to cybersecurity-related "hacking" attacks, intrusions into our systems by unauthorized parties or otherwise, we could incur significant costs, litigation, regulatory enforcement actions and damage to our reputation, any one of which could have a material adverse effect on our business, results of operations or financial condition.

•If our IT systems are impaired, our business could be interrupted, our reputation could be harmed and we may experience lost revenues and increased costs and expenses, any of which could have a material adverse impact on our business, results of operations and financial condition.

•The BrandsMart U.S.A. acquisition may create risks and uncertainties which could materially and adversely affect our business and results of operations.

•We may be unable to realize the anticipated synergies from the BrandsMart U.S.A. acquisition or may incur additional and/or unexpected costs in order to realize them.

•We face many challenges which could have a material adverse effect on our overall results of operations, including the commoditization of certain product categories, increasing competition from a growing variety of sources, a decentralized, high-fixed-cost operating model, adverse consequences to our supply chain function from decreased procurement volumes and from the COVID-19 pandemic, and lower lease volumes, and thus, less recurring revenues written into our customer lease portfolio.

•We are implementing a new strategic plan within our business designed to strengthen and grow our business and generate capital for investment by growing revenue, further reducing costs and strengthening operating margins, and there is no guarantee that it will be successful.

•Our growth strategies may be unsuccessful if we are unable to identify and complete future acquisitions and successfully integrate acquired businesses or assets.

•We could lose our access to third-party data sources, including, for example, those sources that provide us with data that we use as inputs into our centralized decisioning tools, which could cause us competitive harm and have a material adverse effect on our business, results of operations or financial condition.

•We must successfully order and manage our inventory to reflect customer demand and anticipate changing consumer preferences and buying trends or our revenue and profitability will be adversely affected.

•Our competitors could impede our ability to attract new customers, or cause current customers to cease doing business with us, which could have a material adverse effect on our business, results of operations or financial condition.

•Given the nature of the COVID-19 pandemic, including the significant job losses caused by the pandemic, and uncertainty regarding how many unemployed workers will return to their jobs, and when they may do so, our proprietary algorithms and customer lease decisioning tools used to approve customers could no longer be indicative of our customers’ ability to perform under their lease agreements with us.

•Our proprietary algorithms and customer lease decisioning tools used to approve customers could no longer be indicative of our customers’ ability to perform under their lease agreements with us, even after the COVID-19 pandemic subsides.

•Our business and operations are subject to risks related to climate change.

•The COVID-19 pandemic and its continuing impacts may have a material adverse effect on our business, results of operations, financial condition, liquidity and/or cash flow in the future.

•The transactions offered to consumers by our businesses may be negatively characterized by consumer advocacy groups, the media and certain federal, state, provincial, and local government officials, and if those negative characterizations become increasingly accepted by consumers, demand for our services and the transactions we offer could decrease and our business, results of operations or financial condition could be materially and adversely affected.

•We may engage in, or be subject to, litigation with our franchisees.

•Operational compliance and other failures by our franchisees may adversely impact us.

•We are subject to laws that regulate franchisor-franchisee relationships. Our ability to enforce our rights against our franchisees may be adversely affected by these laws, which could impair our growth strategy and cause our franchise revenues to decline.

•Changes to current law with respect to the assignment of liabilities in the franchise business model could materially and adversely affect our profitability.

•The success of our business is dependent on factors impacting consumer spending that are not under our control, including general economic conditions, and unfavorable economic conditions in the markets where we operate could result in increases in lease merchandise write-offs, among other things, which could materially and adversely affect our financial performance.

•The geographic concentration of our store locations may have an adverse impact on our financial performance due to economic downturns and severe weather events in regions where we have a high concentration of stores.

•Our current insurance program may expose us to unexpected costs, including casualty and accident-related self-insured losses, and negatively affect our financial performance.

•We are subject to sales, income and other taxes, which can vary by jurisdiction and be difficult and complex to calculate due to the nature of our business. A failure to correctly calculate and pay such taxes could result in substantial tax liabilities and a material adverse effect on our results of operations.

•Employee misconduct could harm us by subjecting us to monetary loss, significant legal liability, regulatory scrutiny, and reputational harm.

•We have limited recent history of operating as an independent company, and our historical financial information is not necessarily representative of the results that we would have achieved as a separate, publicly traded company and may not be a reliable indicator of our future results.

•Shareholders’ percentage of ownership in us may be diluted in the future.

•We cannot guarantee the timing, amount or payment of dividends on our common stock.

•As a public company, we are required to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act and our failure to do so could materially and adversely affect us.

•Our amended and restated bylaws designate the Georgia State-wide Business Court in the State of Georgia as the exclusive forum for certain litigation, which may limit our shareholders’ ability to choose a judicial forum for disputes with us.

•Certain provisions in our articles of incorporation and bylaws, and of Georgia law, may deter or delay an acquisition of us.

•integrating the operations of the BrandsMart business while carrying on the ongoing operations of the Aaron's and Woodhaven businesses;

•Developing, launching, and managing an in-house LTO purchase solutions, BrandsMart Leasing;

•managing a significantly larger company than before consummation of the BrandsMart business;

•the possibility of faulty assumptions underlying our expectations regarding the integration process, including, among other things, unanticipated delays, costs or inefficiencies;

• the effects of unanticipated liabilities;

•operating a more diversified business;

•integrating two separate business cultures;

•attracting and retaining the necessary personnel associated with the BrandsMart business;

•maintaining relationships with suppliers;

•the challenge of integrating complex systems, IT systems, data privacy and security systems and our ability to maintain the privacy and security of BrandsMart's customer, employee or other confidential information;

•creating uniform standards, controls, procedures, policies and information systems and controlling the costs associated with such matters; and

•integrating information, purchasing, accounting, finance, sales, billing, payroll and regulatory compliance systems.

•changes in competition;

•general economic conditions;

•economic challenges faced by our customer base;

•new product introductions;

•consumer trends;

•rising interest rates;

•lease merchandise write-offs;

•changes in our merchandise mix;

•timing of promotional events;

•our ability to execute our business strategy effectively; and

•the favorable impact of government stimulus and supplemental unemployment benefits on our collections, during the COVID-19 pandemic.

•unrecorded liabilities of acquired companies and unidentified issues that we fail to discover during our due diligence investigations or that are not subject to indemnification or reimbursement by the seller;

•greater than expected expenses such as the need to obtain additional debt or equity financing for any transaction;

•unfavorable accounting treatment and unexpected increases in taxes;

•adverse effects on our ability to maintain relationships with customers, team members, suppliers or other key stakeholders;

•inherent risk associated with entering a geographic area or line of business in which we have no or limited experience;

•difficulty in assimilating the operations and personnel of an acquired company within our existing operations, including the consolidation of corporate and administrative functions;

•the challenge of integrating complex systems, IT systems, data privacy and security systems and our ability to maintain the privacy and security of customer, employee or other confidential information;

•difficulty in conforming standards, controls, procedures and policies, business cultures and compensation structures;

•difficulty in identifying and eliminating redundant and underperforming operations and assets;

•loss of key team members of the acquired company;

•operating inefficiencies that have a negative impact on profitability;

•impairment of goodwill or other acquisition-related intangible assets;

•failure to achieve anticipated synergies or receiving an inadequate return of capital; and

•strains on management and other personnel time and resources to evaluate, negotiate and integrate acquisitions.

Our competitors include national, regional and local “big-box” retailers operators of LTO stores, and virtual LTO companies that offer LTO options through traditional independent, traditional and on-line providers of used goods and merchandise, Buy Now, Pay Later companies, traditional, “big-box” and e-commerce retailers (including retailers who offer layaway programs) and various types of consumer finance companies, including installment, payday and title loan companies, that may enable our customers to shop at traditional or on-line retailers, as well as rental stores that do not offer their customers a purchase option. Our competitors in the traditional and virtual sales and lease ownership and traditional retail markets may have significantly greater financial and operating resources and greater name recognition in certain markets. Greater financial resources may allow our competitors to grow faster than us, including through acquisitions. This in turn may enable them to enter new markets before we can, which may decrease our opportunities in those markets. Greater name recognition, or better public perception of a competitor’s reputation, may help them divert market share away from us, even in our established markets. Some competitors may be willing to offer competing products on an unprofitable basis in an effort to gain market share, which could compel us to

As the virus continues to evolve in the U.S., or if other pandemics, epidemics or similar public health threats (or fears of such events) were to occur, our business, results of operations or financial condition may be materially and adversely affected. The COVID-19 pandemic has adversely impacted unemployment rates, consumer confidence and other aspects of the United States and many other economies, and may continue to do so for an extended period of time. Additionally, workforce costs associated with the COVID-19 pandemic, such as healthcare costs, paid leave, enhanced cleaning and sanitation and vaccine incentive programs, are higher. There may be further increases in unemployment, and further deterioration in other aspects of the economy, as the duration of the COVID-19 pandemic continues and/or its severity increases.

The success of our business is dependent on factors impacting consumer spending that are not under our control, including general economic conditions in the markets where we operate, such as levels of employment, disposable consumer income, rising interest rates, consumer debt and availability of credit, cost of food, energy, and housing and inflationary trends related thereto, recessions and fears of economic downturns, business disruptions due to political or economic instability due to the ongoing conflict between Russia and Ukraine, and consumer confidence in general, all of which are beyond our control. Unfavorable general economic conditions, due to any one or more of these or other factors, could cause our customers and potential customers to forego purchasing or leasing merchandise from us, or to decrease the amount of merchandise that they otherwise may purchase or lease from us, especially with respect to merchandise considered to be discretionary items. Such

•Prior to the consummation of the separation transaction on November 30, 2020, our business was operated by PROG Holdings as part of its broader corporate organization, rather than as an independent company. PROG Holdings or one of its affiliates performed various corporate functions for us, such as legal, treasury, accounting, auditing, human resources, risk management, investor relations, public affairs and finance. Our historical and pro forma financial results reflect allocations of corporate expenses from PROG Holdings for such functions, which may be less than the expenses we would have incurred had we operated as a separate publicly traded company.

•Prior to the consummation of the separation on November 30, 2020, our business was integrated with the other businesses of PROG Holdings. Thus, we had shared economies of scope and scale in costs, team members, and certain vendor relationships. This loss of these economies of scope and scale may result in us paying higher charges than in the past for these services. This could have a material adverse effect on our business, results of operations, financial condition and the completion of the distribution.

•Our cost of capital for our business may be higher than PROG Holdings’ cost of capital prior to the separation.

•Our historical financial information does not reflect the debt that we expect to have on our balance sheet in future periods.

•We do not expect to incur any additional separation and distribution costs that would be material. However, if we do incur additional material costs and we do not have sufficient cash available to repay such costs, we may be required to borrow under our revolving credit facility to repay such amounts, resulting in greater interest expense.

In the future, shareholders' percentage ownership in us may be diluted because of equity issuances for acquisitions, capital market transactions or otherwise, including equity and stock-based awards that we will be granting to our directors, officers and team members. Such awards have a dilutive effect on our earnings per share, which could adversely affect the market price of our common stock.

In addition, our amended and restated articles of incorporation allow us to issue, without approval of our shareholders, one or more classes or series of preferred stock having such designation, powers, preferences and relative, participating, optional and other special rights, including preferences over our common stock respecting dividends and distributions, as our Board generally may determine. The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of our common stock. Similarly, the repurchase or redemption rights or liquidation preferences we could assign to holders of preferred stock could affect the residual value of our common stock.

The integration of acquired businesses, including the BrandsMart U.S.A. acquisition completed in April 2022, may result in our systems and controls becoming increasingly complex and more difficult to manage. The integration of BrandsMart U.S.A. may also result in material challenges to the Company’s control environment, including managing a larger, more complex combined business; maintaining employee morale and retaining key management and other employees; unanticipated issues in integrating financial reporting and information technology infrastructure; and harmonizing the companies’ operating practices, internal controls, compliance programs and other policies, procedures and processes. We may also encounter difficulties in addressing possible differences in business backgrounds, corporate cultures and management philosophies, and maintaining adequate staffing, which could potentially pose challenges in the implementation and operation of controls. We may also identify or fail to identify potential deficiencies in internal controls at the acquired or combined business. The integration of the internal controls related to BrandsMart U.S.A. acquisition into ours is currently ongoing. We have excluded the acquisition of BrandsMart U.S.A. from our evaluation of internal control over financial reporting as of December 31, 2022. This exclusion is in accordance with the United States Securities and Exchange Commission’s guidance permitting a company to exclude an acquired business from management’s assessment of the effectiveness of internal control over financial reporting for up to one year following the acquisition. Any difficulties in the assimilation of BrandsMart U.S.A. into our internal control framework could harm our operating results or cause us to fail to meet our financial reporting obligations in future periods.

			Stores						Stores
Alaska			2			North Carolina			63
Alabama			30			New Hampshire			5
Arkansas			9			New Jersey			10
Arizona			26			New Mexico			19
California			33			Nevada			5
Colorado			8			New York			32
Connecticut			9			Ohio			58
Delaware			1			Oklahoma			24
Florida			75			Oregon			20
Georgia			69			Pennsylvania			36
Iowa			1			Rhode Island			2
Idaho			7			South Carolina			32
Illinois			16			Tennessee			41
Indiana			25			Texas			146
Kansas			7			Utah			2
Kentucky			6			Virginia			35
Louisiana			40			Vermont			3
Massachusetts			14			Washington			17
Maryland			11			West Virginia			1
Maine			6			Wyoming			1
Michigan			28			Canada			19
Missouri			12			Total Company-operated Aaron's Stores			1,034
Mississippi			28

			Stores
Florida			8
Georgia			2
Total BrandsMart U.S.A. Stores			10

LOCATION			SEGMENT, PRIMARY USE AND HOW HELD			SQ. FT.
Atlanta, Georgia			Executive/Administrative Offices – Leased			74,000
Ft. Lauderdale, Florida			Administrative Offices – Leased			25,150
Various properties in Cairo and Coolidge, Georgia			Furniture Manufacturing, Furniture Parts Warehouse, Administration and Showroom – Primarily Owned			738,000

Period			Total Number of Shares Purchased			Average Price Paid per share			Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs			Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs1
October 1, 2022 through October 31, 2022			—			$	—		—			$	135,847,377
November 1, 2022 through November 30, 2022			187,476			10.55			187,476			133,869,290
December 1, 2022 through December 31, 2022			31,416			11.20			31,416			133,517,323
Total			218,892						218,892

1Share repurchases are conducted under authorizations made from time to time by our Board. The most recent authorization was publicly announced on March 2, 2022, which increased the Company's share repurchase authorization amount to $250.0 million from the previous authorized amount of $150.0 million, and extended the maturity date by one year to December 31, 2024. Subject to the terms of our Board's authorization and applicable law, repurchases may be made at such times and in such amounts as the Company deems appropriate through December 31, 2024. Repurchases may be discontinued at any time.

The line graph above and the table below compare, for the period immediately after the separation and distribution date through the remainder of the fiscal year ending December 31, 2020 and the fiscal years ending December 31, 2021 and December 31, 2022, the dollar change in the cumulative total shareholder returns (assuming reinvestment of dividends) on the Company's common stock with that of the S&P Smallcap 600 Index, the S&P 600 Retailing Index, and the S&P 600 Specialty Retail Index. We regularly evaluate our Peer Group Indexes to ensure each is reflective of our Company's business operations and characteristics. Prior to 2022, the Company's Peer Group indexes consisted of the S&P Smallcap 600 Index and the S&P 600 Retailing Index. During the year ended December 31, 2022, management elected to update the indexes for the Company's Peer Group to include the S&P 600 Specialty Retail Index, as it was determined to better align with the Company for benchmarking and performance incentive purposes. The S&P 600 Retailing Index was included in the graph above for prior year comparative purposes only.

			11/30/2020			12/31/2020			12/31/2021			12/31/2022
The Aaron's Company, Inc.			$	100.00		$	98.80		$	130.33		$	65.13
S&P Smallcap 600			100.00			108.32			137.37			115.26
S&P 600 Retailing Index			100.00			106.84			181.02			137.66
S&P 600 Specialty Retail Index			100.00			108.42			181.12			142.31

•Transform the Aaron's Business

•Aligning the Aaron's Store Footprint to our Customer Opportunity - We continue to invest in our market strategy capabilities to make better-informed, evidence-driven decisions around store location and the optimization of operating expenses primarily through our Gen-Next store concept model further described below. We've also enhanced our market optimization strategy with a new "Hub and Showroom" model which leverages existing infrastructure to more efficiently serve markets by combining servicing capabilities of multiple stores into a "hub" store while converting other nearby stores into "showrooms" that focus on sales activities.

•Promote our Value Proposition to Retain and Attract New Customers to our Brand – We continue to invest in e-commerce, innovative marketing campaigns, and our lease decisioning and digital platforms to illustrate our value proposition to new and existing customers. Such initiatives and investments include:

◦Making investments to drive growth and consumer traffic through our e-commerce customer acquisition channel by consistently investing in improvements that provide a fully transactional, mobile optimized, and seamless shopping experience that includes broader product selections, all of which are intended to attract newer and younger customers.

◦Utilizing a broad spectrum of traditional and digital bilingual marketing communications, ranging from direct mail, social media, display, and local market media, all allowing us to customize messages around price, value, and payment flexibility. The Company is also increasing its local marketing and promotions focus on weekly payment offerings to attract more customers and gain market share.

◦Continuing investments in lease decisioning and other digital platforms that allow us to optimize lease portfolio performance through analytics and machine learnings. Other digital investments aimed at enhancing the customer's experience include continued investments in digital payment and servicing platforms.

•Enhance and Grow BrandsMart

•Achieve Transaction Synergies - We continue to make progress in executing our synergy initiatives in connection with the acquisition of BrandsMart U.SA. in order to drive meaningful value-creation opportunities for the business. These initiatives include:

◦The deployment of a new “in-house” lease-to-own solution, which is now available at BrandsMart's stores ("BrandsMart Leasing").

◦Offering a wider selection of BrandsMart's product assortment to Aaron's customers through the aarons.com e-commerce platform, and

◦Leveraging complementary purchasing capabilities and increased scale to generate direct procurement savings across both businesses.

•Grow Addressable Market - The acquisition of BrandsMart U.S.A. broadens our customer reach and significantly expands our total addressable market. Our BrandsMart growth initiatives include:

◦Capturing share in adjacent geographic markets by opening new BrandsMart stores. Over the next three years, we expect to open 1-2 new stores per year starting in 2023, and one new outlet center by the end of 2025.

◦Making investments to drive growth and consumer traffic through our e-commerce customer acquisition channel by investing in enhancements to the online shopping experience through website redesign, expanded product selection, and enhanced digital marketing strategies that drive qualified traffic.

•Enterprise Initiatives

•Strengthen Operational Efficiencies and Optimize Cost Structure - During 2022, the Company initiated an operational efficiency and optimization restructuring program intended to reduce the Company’s overall costs further described below.

•Further environmental, social, and governance initiatives ("ESG") - We continue to invest in building a people-focused workplace culture and in opportunities to make a positive impact on the environment and the communities where our customers and team members live and work. To do this, we continued to enhance our compliance, enterprise risk management, corporate governance, diversity and inclusion, and environmental management programs and have developed roadmaps for enhancing these programs in 2023 and beyond.

In January 2023, the Company announced a headcount reduction of its store support center and Aaron's Business store oversight functions to more closely align with current business conditions resulting in the recognition of $1.8 million in severance charges during the first quarter of 2023.

•Consolidated revenues were $2.25 billion in 2022 compared to $1.85 billion in 2021, an increase of 21.9%. This increase is primarily due to the inclusion of BrandsMart in the Company's consolidated results subsequent to the April 1, 2022 acquisition date.

•Total revenues for the Aaron's Business were $1.70 billion in 2022 compared to $1.85 billion in 2021, a decrease of 7.7%. This decrease is primarily due to a 6.4% decrease in same store revenues primarily driven by the lease portfolio size declining during the period, a lower lease renewal rate, lower exercise of early purchase options, and lower retail sales.

•The same store lease portfolio, excluding BrandsMart Leasing, began 2022 at $97.4 million, up 5.8% compared to the beginning of 2021, and ended 2022 at $92.0 million, down 5.6% compared to the end of 2021.

•E-commerce revenues, based on the number of stores open as of December 31, 2022, increased 6.5% at the Aaron's Business and by 8.5% at BrandsMart during the years ended December 31, 2022.

•During the year ended December 31, 2022, the Company opened 95 new GenNext locations. Combined with the 116 locations open at the beginning of the year, total GenNext stores contributed 19.7% of total lease and retail revenues for the Aaron's Business during the year ended December 31, 2022.

•The loss before income taxes was $14.7 million during the year ended December 31, 2022 and was negatively impacted by restructuring charges of $32.7 million, a non-cash charge for a fair value adjustment to the acquired BrandsMart merchandise inventories of $23.1 million, BrandsMart U.S.A. acquisition-related costs of $14.6 million, goodwill impairment charges of $12.9 million recognized for the Aaron's Business reporting unit, acquisition-related intangible amortization expense of $9.0 million, and separation-related costs of $1.2 million.

•Earnings before income taxes were $145.9 million during the year ended December 31, 2021 and were negatively impacted by restructuring charges of $9.2 million and separation-related costs of $6.7 million.

•Diluted losses per share for the year ended December 31, 2022 were $0.17 compared with diluted earnings per share of $3.26 in 2021.

•The Company repurchased 735,032 shares of common stock for $13.4 million during the year ended December 31, 2022, which represented approximately 2.4% of the common stock outstanding as of December 31, 2021.

			2022						2021						2020
Company-operated Aaron's Stores
Company-operated Aaron's stores open at January 1,			1,074						1,092						1,167
Opened			—						—						4
Added through acquisition			—						11						15
Closed, sold or merged			(40)						(29)						(94)
Company-operated Aaron's stores open at December 31,			1,034						1,074						1,092
GenNext (included in Company-Operated)			211						116						47
Franchised Aaron's Stores
Franchised Aaron's stores open at January 1,			236						248						335
Purchased by the Company			—						(11)						(15)
Closed, sold or merged			(4)						(1)						(72)
Franchised Aaron's stores open at December 31,			232						236						248
BrandsMart U.S.A. Stores
BrandsMart U.S.A. stores open at January 1,			—						—						—
Purchased by the Company			10						—						—
BrandsMart U.S.A. stores open at December 31,			10						—						—

Lease Portfolio Size. Our lease portfolio size for the Aaron's Business, excluding BrandsMart Leasing, represents the total balance of collectible lease payments for the next month derived from our aggregate outstanding customer lease agreements at a point in time. As of the end of any month, the lease portfolio size is calculated as the lease portfolio size at the beginning of the period plus collectible lease payments for the next month derived from new lease agreements originated in the period less the reduction in collectible lease payments for the next month primarily as a result of customer agreements that reach full ownership, customer early purchase option exercises, lease merchandise returns, and write-offs. Lease portfolio size provides management insight into expected future collectible lease payments. The Company ended the fourth quarter of 2022 with a lease portfolio size for all Company-operated Aaron's stores of $126.5 million, a decrease of 7.2% compared to the lease portfolio size as of December 31, 2021.

Lease Renewal Rate. Our lease renewal rate for the Aaron's Business, excluding BrandsMart Leasing, for any given period represents the weighted average of the monthly lease renewal rates for each month in the period. The monthly lease renewal rate for any month is calculated by dividing (i) the lease revenues collected or renewed related to leased merchandise for such month by (ii) the lease portfolio size as of the beginning of such month. The lease renewal rate provides management insight into the Company's success in retaining current customers within our customer lease portfolio over a given period and provides visibility into expected future customer lease payments and the related lease revenue. The lease renewal rate for 2022 was 87.5%, compared to 90.6% for 2021.

BrandsMart. Key metrics for BrandsMart will be included when prior year comparable periods are included in the financial

Personnel Costs. Personnel costs represents total compensation costs incurred for services provided by team members of the Company with the exception of compensation costs that are eligible for capitalization.

Provision for Lease Merchandise Write-offs. Provision for lease merchandise write-offs represents charges incurred related to estimated lease merchandise write-offs.

Restructuring Expenses, Net. Restructuring expenses, net are comprised principally of closed store operating lease right-of-use asset impairment and operating lease charges, fixed asset impairment charges, professional advisory fees, and expenses related to workforce reductions. Such costs are recorded within the Unallocated Corporate category of segment reporting. Refer to Note 11 of the accompanying consolidated and combined financial statements for further discussion of restructuring expenses, net.

Impairment of Goodwill. Impairment of goodwill is the full write-off of the goodwill balance at the Aaron's Business reporting unit that occurred during the year ended December 31, 2022. Refer to Note 3 of the accompanying consolidated and combined financial statements for further discussion of the interim goodwill impairment assessment and the resulting impairment charge. This impairment charge was recorded within the Unallocated Corporate category of segment reporting.

Interest Expense. Interest expense consists primarily of interest on the Company's variable rate borrowings, commitment fees on unused balances of the Credit Facility (as defined below), as well as the amortization of debt issuance costs. Such costs are recorded within the Unallocated Corporate category of segment reporting.

Other Non-Operating (Expense) Income, Net. Other non-operating (expense) income, net includes the impact of foreign currency remeasurement, as well as gains and losses resulting from changes in the cash surrender value of Company-owned life insurance related to the Company’s deferred compensation plan. This activity also includes earnings on cash and cash equivalent investments.

															Change
			Year Ended December 31,												2022 vs. 2021
(In Thousands)			2022						2021						$						%
REVENUES:
Lease Revenues and Fees			$	1,529,125					$	1,633,489					$	(104,364)					(6.4)		%
Retail Sales			585,624						57,568						528,056						nmf
Non-Retail Sales			110,531						128,299						(17,768)						(13.8)
Franchise Royalties and Other Revenues			24,154						26,148						(1,994)						(7.6)
			2,249,434						1,845,504						403,930						21.9
COSTS OF REVENUES:
Depreciation of Lease Merchandise and Other Lease Revenue Costs			513,659						531,859						(18,200)						(3.4)
Retail Cost of Sales			474,879						38,033						436,846						nmf
Non-Retail Cost of Sales			99,123						116,123						(17,000)						(14.6)
			1,087,661						686,015						401,646						58.5
GROSS PROFIT			1,161,773						1,159,489						2,284						0.2
Gross Profit %			51.6%						62.8%
OPERATING EXPENSES:
Personnel Costs			515,144						495,411						19,733						4.0
Other Operating Expenses, Net			490,143						434,491						55,652						12.8
Provision for Lease Merchandise Write-Offs			97,564						67,888						29,676						43.7
Restructuring Expenses, Net			32,717						9,218						23,499						nmf
Impairment of Goodwill			12,933						—						12,933						nmf
Separation Costs			1,204						6,732						(5,528)						(82.1)
Acquisition-Related Costs			14,616						—						14,616						nmf
			1,164,321						1,013,740						150,581						14.9
OPERATING (LOSS) PROFIT			(2,548)						145,749						(148,297)						(101.7)
Interest Expense			(9,875)						(1,460)						(8,415)						nmf
Other Non-Operating (Expense) Income, Net			(2,320)						1,581						(3,901)						nmf
(LOSS) EARNINGS BEFORE INCOME TAXES			(14,743)						145,870						(160,613)						(110.1)
INCOME TAX (BENEFIT) EXPENSE			(9,463)						35,936						(45,399)						(126.3)
NET (LOSS) EARNINGS			$	(5,280)					$	109,934					$	(115,214)					(104.8)

Revenues. Total consolidated revenues were $2.25 billion during the year ended December 31, 2022, a $403.9 million increase compared to the year ended December 31, 2021. This increase was primarily driven by the acquisition of BrandsMart U.S.A. on April 1, 2022, which resulted in revenues of $552.5 million in the BrandsMart segment during the year ended December 31, 2022. This increase was partially offset by a $142.0 million decrease in revenues in the Aaron's Business segment during the year ended December 31, 2022, as discussed further in the "Segment Performance" section below.

Gross Profit. Consolidated gross profit for the Company was $1.16 billion during the year ended December 31, 2022, a $2.3 million increase compared to the prior year period. This increase was primarily driven by the acquisition of BrandsMart U.S.A. on April 1, 2022, which resulted in gross profit of $101.4 million in the BrandsMart segment during the year ended December 31, 2022. This increase was partially offset by a $98.2 million decrease in gross profit at the Aaron's Business segment during the year ended December 31, 2022, as discussed further in the "Segment Performance" section below. Gross profit for the BrandsMart segment during 2022 includes a one-time $23.1 million non-cash charge for a fair value adjustment to the acquired merchandise inventories.

Personnel Costs. Personnel costs increased by $19.7 million due primarily to the acquisition of BrandsMart U.S.A., which resulted in personnel costs of $54.2 million during 2022, partially offset by lower performance-based incentive compensation in the Aaron's Business segment and Unallocated Corporate category.

Other Operating Expenses, Net. Information about certain significant components of other operating expenses, net for the consolidated Company is as follows:

															Change
			Year Ended December 31,												2022 vs. 2021
(In Thousands)			2022						2021						$						%
Occupancy Costs			$	215,431					$	173,508					$	41,923					24.2		%
Shipping and Handling			70,144						60,354						9,790						16.2
Advertising Costs			39,121						53,651						(14,530)						(27.1)
Intangible Amortization			9,330						5,528						3,802						68.8
Professional Services			17,102						15,684						1,418						9.0
Bank and Credit Card Related Fees			31,081						21,111						9,970						47.2
Gains on Dispositions of Store-Related Assets, net			(11,665)						(3,862)						(7,803)						nmf
Other Miscellaneous Expenses, net			119,599						108,517						11,082						10.2
Other Operating Expenses, net			$	490,143					$	434,491					$	55,652					12.8		%

Restructuring Expenses, Net. Restructuring activity for the year ended December 31, 2022 resulted in expenses of $32.7 million, which were primarily comprised of $16.2 million of operating lease right-of-use asset and fixed asset impairment for Company-operated Aaron's stores identified for closure in 2022 as well as an administrative building in Kennesaw, Georgia, $7.2 million of continuing variable occupancy costs incurred related to previously closed stores, $4.9 million of professional advisory fees related to cost optimization initiatives, and $3.1 million of severance charges related to reductions in store support center staff. Restructuring expenses for the year ended December 31, 2021 were $9.2 million and were primarily comprised of $4.8 million of continuing variable occupancy costs incurred related to previously closed stores and $4.8 million of operating lease right-of-use asset and fixed asset impairment for Company-operated stores identified for closure during 2021, partially offset by net gains of $1.1 million on the sale of store properties and store-related assets that had been previously impaired in conjunction with the repositioning and optimization program in prior periods.

Impairment of Goodwill. During the year ended December 31, 2022, the Company recorded an impairment charge of

Interest Expense. Interest expense increased to $9.9 million for the year ended December 31, 2022 from $1.5 million for the year ended December 31, 2021. Interest expense for the year ended December 31, 2022 consists primarily of interest on the Company's variable rate borrowings under the Credit Facility and commitment fees on unused balances, as well as the amortization of debt issuance costs. Interest expense for the year ended December 31, 2021 consists primarily of commitment fees on unused balances of the Company's previous revolving credit and term loan facility, as well as the amortization of debt issuance costs.

Other Non-Operating (Expense) Income, Net. Other non-operating (expense) income, net, includes (a) net gains and losses resulting from changes in the cash surrender value of Company-owned life insurance related to the Company's deferred compensation plan; (b) the impact of foreign currency remeasurement; and (c) earnings on cash and cash equivalent investments. The changes in the cash surrender value of Company-owned life insurance resulted in net losses of $2.3 million and net gains of $1.6 million during the years ended December 31, 2022 and 2021, respectively. Foreign currency remeasurement net losses resulting from changes in the value of the U.S. dollar against the Canadian dollar and earnings on cash and cash equivalent investments were not significant in 2022 or 2021.

Segment Performance – Years Ended December 31, 2022 and 2021

			Year Ended December 31,												Change
(In Thousands)			2022						2021						$						%
Lease Revenues and Fees			$	1,529,125					$	1,633,489					$	(104,364)					(6.4)		%
Retail Sales			39,693						57,568						(17,875)						(31.1)
Non-Retail Sales			110,531						128,299						(17,768)						(13.8)
Franchise Royalties and Fees			23,376						25,129						(1,753)						(7.0)
Other			778						1,019						(241)						(23.7)
Total Revenues - Aaron's Business			$	1,703,503					$	1,845,504					$	(142,001)					(7.7)		%

E-commerce revenues, based on stores open as of December 31, 2022, increased 6.5% compared to the prior year period and were 15.8% and 14.2% of total lease revenues and fees during the years ended December 31, 2022 and 2021, respectively.

			Year Ended December 31,																		Change
(In Thousands)			2022						2021												$						%
Gross Profit			$	1,061,266					$	1,159,489											$	(98,223)					(8.5)		%
Earnings Before Income Taxes			122,220						223,448												(101,228)						(45.3)

			Year Ended December 31,																		Change
(In Thousands)			2022						2021												$						%
Retail Sales			$	552,465					$	—											$	552,465					nmf
Gross Profit			101,364						—												101,364						nmf
(Loss) Earnings Before Income Taxes			(11,171)						—												(11,171)						nmf

Gross Profit. Gross profit for retail sales for the BrandsMart segment has been included in the Company's consolidated results from the April 1, 2022 acquisition date and was $101.4 million during the year ended December 31, 2022. As a percentage of revenues, gross profit for the BrandsMart segment was 18.3% during the year ended December 31, 2022. Gross profit for the BrandsMart segment during the year ended December 31, 2022 includes a one-time $23.1 million non-cash charge for a fair value adjustment to the acquired merchandise inventories.

(Losses) Earnings before Income Taxes. The BrandsMart segment reported a loss before income taxes of $11.2 million during the year ended December 31, 2022. The results for the BrandsMart segment during the year ended December 31, 2022 reflect a one-time $23.1 million non-cash charge for a fair value adjustment to the acquired merchandise inventories.

•Cash and cash equivalents increased $4.9 million to $27.7 million at December 31, 2022. For additional information, refer to the "Liquidity and Capital Resources" section below.

•The Company's consolidated balance sheet as of December 31, 2022 includes merchandise inventories of $96.0 million associated with the BrandsMart U.S.A. acquisition.

•Property, plant and equipment increased $36.6 million primarily due to an increase in capital expenditures associated with the Company's real estate optimization strategy.

•Operating lease right-of-use assets and operating lease liabilities increased $181.8 million and $186.6 million, respectively, primarily due to the addition of BrandsMart's operating leases as well as additional real estate lease agreements and amendments executed for Company-operated Aaron's stores during the year ended December 31, 2022. The increase in the Company's operating lease right-of-use assets was partially offset by regularly scheduled amortization of right-of-use assets and impairment charges recorded in connection with restructuring actions. The increase in the Company's operating lease liabilities was partially offset by contractual lease payments net of the accretion of interest.

•Goodwill increased $41.6 million due primarily to the addition of estimated BrandsMart-related goodwill of $54.7 million, partially offset by an impairment charge of $12.9 million to fully write-off the Aaron's Business goodwill balance during the year ended December 31, 2022. Refer to Note 2 to the accompanying consolidated and combined financial statements for further details regarding the preliminary acquisition accounting for the BrandsMart U.S.A. acquisition.

•Other intangibles increased $113.4 million due primarily to recording the estimated fair value of identifiable BrandsMart-related intangible assets of $123.0 million, partially offset by amortization expense recognized during the year ended December 31, 2022. Refer to Note 2 to the accompanying consolidated and combined financial statements for further details regarding the preliminary acquisition accounting for the BrandsMart U.S.A acquisition.

•Debt increased $232.4 million primarily due to the Company's borrowings under the Credit Facility that occurred during April 2022 to finance the purchase price for the BrandsMart U.S.A. acquisition and other customary acquisition and financing-related closing costs and adjustments, partially offset by payments made on the Revolving Facility and Term Loan during the year ended December 31, 2022. Refer to the "Liquidity and Capital Resources" section below for further details regarding the Company’s financing arrangements.

•Treasury shares increased $16.9 million due primarily to the Company's repurchase of 735,032 shares of common stock for $13.4 million during the year ended December 31, 2022.

Franchise Loan Guaranty. We have guaranteed the borrowings of certain independent franchisees under a franchise loan agreement (the "Franchise Loan Facility") with a bank that is a party to our Revolving Facility. As further described in Note 8 to the accompanying consolidated and combined financial statements, a new Franchise Loan Facility agreement was entered into by the Company on April 1, 2022. This new agreement reduced the total commitment under the Franchise Loan Facility, from $15.0 million to $12.5 million and extended the commitment termination date to March 31, 2023. We are able to request an additional 364-day extension of our Franchise Loan Facility, as long as we are not in violation of any of the covenants under that facility or our Revolving Facility, and no event of default exists under those agreements, until such time as our Revolving Facility expires. We currently expect to include a franchise loan facility as part of any extension or renewal of our Revolving Facility thereafter. At December 31, 2022, the maximum amount that the Company would be obligated to repay in the event franchisees defaulted was $6.3 million, which would be due in full within 75 days of the event of default. On February 10, 2023, the Company amended its Franchise Loan Facility to extend the maturity date from March 31, 2023 to March 30, 2024. Subsequently on February 23, 2023, the Company amended its Franchise Loan Facility to reduce the total commitment amount from $12.5 million to $10.0 million.

Inventory Financing Agreement. The Company previously maintained an inventory financing agreement for its BrandsMart segment with a lender that provided financing up to $65.0 million for the BrandsMart segment to purchase merchandise inventories from certain vendors as defined in the agreement. Amounts borrowed by the Company under the inventory loan were to be repaid based on the payment terms (pay-as-sold or scheduled payment program) as defined in the agreement, with all borrowings due within 50 days. The inventory loan was collateralized by all personal property of the BrandsMart segment, including merchandise inventories, equipment and other goods. Interest was due monthly on the outstanding principal based on the higher of prime-rate, 1-month LIBOR or 3-month LIBOR, commencing typically and only after 30 days of the borrowing or the free floor period as defined in the agreement. The inventory financing agreement was terminable with 30 days prior written notice from one party to the other. The inventory loan contained certain affirmative and negative covenants, which, among other things, restricted encumbrances of certain corporate assets and obtaining additional debt. The Company terminated the inventory financing agreement during the fourth quarter of 2022, and therefore there were no borrowings outstanding under the inventory loan of December 31, 2022.

Purchase Obligations. The Company has non-cancellable purchase obligations of $28.6 million primarily related to certain advertising and marketing programs, software licenses, and hardware and software maintenance. Payments under these commitments are scheduled to be $14.7 million in 2023, $9.2 million in 2024, $3.7 million in 2025 and $1.0 million in 2026. These amounts include only those purchase obligations for which the timing and amount of payments is certain. We have no long-term commitments to purchase merchandise nor do we have significant purchase agreements that specify minimum quantities or set prices that exceed our expected requirements for three months.

Merchandise Inventories

(In Thousands)			December 31, 2022
Merchandise Inventories, gross			$	96,945
Reserve for Merchandise Inventories			(981)
Merchandise Inventories, net			$	95,964

			Year Ended
(In Thousands)			December 31, 2022
Beginning Balance			$	—
Merchandise Written off			—
Provision for Write-offs			981
Ending Balance			$	981

			December 31
(In Thousands)			2022						2021
Goodwill			$	54,710					$	13,134
Definite-Lived Intangible Assets, Net			118,528						5,095
Goodwill and Other Intangibles, Net			$	173,238					$	18,229

During the fourth quarter of 2022, in connection with its annual impairment testing, management evaluated the various components of the operating segments further described in Note 12 to the accompanying consolidated and combined financial statements and identified three reporting units: Aaron's Business, BrandsMart, and BrandsMart Leasing, each as described below.

Corporate Allocations Prior to the Separation and Distribution

						Estimated claims liabilities costs
Description of the Matter						At December 31, 2022, the Company recorded $58.5 million associated with its estimated claims liabilities costs, which primarily relate to workers compensation and vehicle liability insurance for the Aaron's Business segment (collectively, the estimated claims liabilities). As discussed in Note 1 to the consolidated and combined financial statements, the estimated claims liabilities are recorded based on actual reported but unpaid claims and actuarial analysis of the projected claims run off for both reported and incurred but not reported claims. This analysis is based upon an assessment of the likely outcome or historical experience. Auditing the Company's estimated claims liabilities is complex and required us to involve our actuarial specialists due to the measurement uncertainty associated with the estimates and the use of various actuarial methods. The Company’s analyses of the estimated claims liabilities consider a variety of factors, including the actuarial loss forecasts, company-specific development factors, general industry loss development factors and third-party claim administrator loss estimates of individual claims. The estimated claims liabilities are sensitive to changes in these factors.
How We Addressed the Matter in Our Audit						We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company’s controls over the estimated claims liabilities process. For example, we tested controls over the factors mentioned above that management used in the calculations and the completeness and accuracy of the data underlying the ultimate expected losses. To evaluate the reserve for estimated claims liabilities, we performed audit procedures that included, among others, testing the completeness and accuracy of the underlying claims data used in the Company’s actuarial analyses. Additionally, we involved our actuarial specialists to assist in our evaluation of the key factors mentioned above and management’s methodologies to establish the actuarially determined ultimate expected losses and to develop a range for ultimate expected loss estimates based on independently developed assumptions, which we compared to the Company's recorded estimated claims liabilities.
						BrandsMart Acquisition - Trade names Intangible
Description of the Matter						On April 1, 2022, the Company completed the acquisition of BrandsMart U.S.A. ("BrandsMart") for total consideration of $272.4 million, net of cash acquired, including working capital and cash adjustments ("the Transaction") as disclosed in Note 2 to the consolidated and combined financial statements. The Transaction is accounted for as a business combination and the Company preliminary allocated $108.0 million of the purchase price to the fair value of the acquired trade names intangible asset. The Company is in the process of analyzing the estimated values of assets acquired and liabilities assumed, and therefore, the allocation of the purchase price is preliminary as of December 31, 2022. Auditing management's estimate of the trade names fair value for purposes of its preliminary allocation of purchase price for its acquisition of BrandsMart involved especially subjective and complex judgements in determining the fair value of the trade names intangible asset. The estimation uncertainty was primarily due to the complexity of the valuation models used to measure that fair value as well as the sensitivity of the underlying significant assumptions such as projected revenues, operating results, discount rate and long-term growth rate. These significant assumptions are forward-looking and could be affected by future economic and market conditions.
How We Addressed the Matter in Our Audit						We tested the design and operating effectiveness of the Company's controls related to the accounting for the BrandsMart acquisition. For example, we tested controls over the recognition and measurement of the trade name intangible asset in the acquisition, including the Company's controls over the valuation model, the mathematical accuracy of the valuation model and development of underlying assumptions used to develop the fair value measurement estimate. To test the fair value of the Company's trade names intangible asset, our audit procedures included, among others, evaluating the Company's valuation model and significant assumptions used and testing the completeness and accuracy of the underlying data supporting the significant assumptions discussed above. We involved our valuation specialists to assist with our evaluation of the valuation model and certain of the significant assumptions discussed above. In addition, to evaluate the effect of changes in assumptions, we performed sensitivity analysis of the fair value of the trade names intangible asset.

						Valuation of Goodwill - BrandsMart reporting unit
Description of the Matter						As discussed in Note 3 of the consolidated and combined financial statements, goodwill is tested for impairment at least annually at the reporting unit level. This requires management to estimate the fair value of the reporting units with goodwill allocated to them. The Company estimates the fair value based on a combination of the discounted cash flow method and guideline public-company method. As of the annual impairment testing date of October 1, 2022, the BrandsMart reporting unit goodwill balance totaled $28.2 million. Auditing management's goodwill impairment tests involved especially subjective judgements due to the significant estimation required in determining the fair value of the reporting unit. In particular, the estimate of the fair value for the Company's BrandsMart reporting unit is sensitive to changes in assumptions such as the discount rate, the long-term growth rate and expected future net cash flows, including projected operating revenue, operating results and capital expenditures, which are affected by expectations about future market and economic conditions.
How We Addressed the Matter in Our Audit						We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company's goodwill impairment review process. For example, we tested controls over the estimation of the fair value of the reporting unit, including the Company's controls over the valuation model, the mathematical accuracy of the valuation model and development of underlying assumptions used to estimate the fair value of the reporting unit. We also tested management's review of the reconciliation of the aggregate estimated fair value of the reporting units to the market capitalization of the Company. To test the estimated fair value of the Company's BrandsMart reporting unit, our audit procedures included, among others, assessing the valuation methodology, the guideline public companies selected, and the underlying data used by the Company in its analysis, including testing the significant assumptions discussed above. We compared the significant assumptions discussed above used by management to current industry and economic trends, changes to the Company's business model and other relevant factors. We performed sensitivity analyses of these significant assumptions to evaluate the changes in the fair value of the reporting unit that would result from changes in these assumptions. We involved valuation specialists to assist in our evaluation of the valuation methodology and the significant assumptions used in determining the fair value of the reporting unit. We also tested the reconciliation of the aggregate estimated fair value of the reporting units to the market capitalization of the Company.

We have audited The Aaron’s Company, Inc.’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, The Aaron's Company, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.

			December 31,
			2022						2021
			(In Thousands)
ASSETS:
Cash and Cash Equivalents			$	27,716					$	22,832
Accounts Receivable (net of allowances of $8,895 in 2022 and $7,163 in 2021)			38,191						29,443
Lease Merchandise (net of accumulated depreciation and allowances of $431,092 in 2022 and $439,745 in 2021)			693,795						772,154
Merchandise Inventories, Net			95,964						—
Property, Plant and Equipment, Net			267,457						230,895
Operating Lease Right-of-Use Assets			459,950						278,125
Goodwill			54,710						13,134
Other Intangibles, Net			118,528						5,095
Income Tax Receivable			5,716						3,587
Prepaid Expenses and Other Assets			96,436						86,000
Total Assets			$	1,858,463					$	1,441,265
LIABILITIES & SHAREHOLDERS' EQUITY:
Accounts Payable and Accrued Expenses			$	264,043					$	244,670
Deferred Income Taxes Payable			87,008						92,306
Customer Deposits and Advance Payments			73,196						66,289
Operating Lease Liabilities			496,401						309,834
Debt			242,413						10,000
Total Liabilities			1,163,061						723,099
Commitments and Contingencies (Note 10)
Shareholders' Equity:
Common Stock, Par Value $0.50 Per Share: Authorized: 112,500,000 Shares at December 31, 2022 and December 31, 2021; Shares Issued: 36,100,011 at December 31, 2022 and 35,558,714 at December 31, 2021			18,050						17,779
Additional Paid-in Capital			738,428						724,384
Retained Earnings			79,073						98,546
Accumulated Other Comprehensive Loss			(1,396)						(739)
			834,155						839,970
Less: Treasury Shares at Cost
5,480,353 Shares at December 31, 2022 and 4,580,390 Shares at December 31, 2021			(138,753)						(121,804)
Total Shareholders' Equity			695,402						718,166
Total Liabilities & Shareholders' Equity			$	1,858,463					$	1,441,265

			Year Ended December 31,
			2022						2021						2020
			(In Thousands)
REVENUES:
Lease Revenues and Fees			$	1,529,125					$	1,633,489					$	1,530,464
Retail Sales			585,624						57,568						47,345
Non-Retail Sales			110,531						128,299						127,652
Franchise Royalties and Other Revenues			24,154						26,148						29,458
			2,249,434						1,845,504						1,734,919
COSTS OF REVENUES:
Depreciation of Lease Merchandise and Other Lease Revenue Costs			513,659						531,859						510,709
Retail Cost of Sales			474,879						38,033						29,874
Non-Retail Cost of Sales			99,123						116,123						110,794
			1,087,661						686,015						651,377
GROSS PROFIT			1,161,773						1,159,489						1,083,542
OPERATING EXPENSES:
Personnel Costs			515,144						495,411						476,575
Other Operating Expenses, Net			490,143						434,491						419,108
Provision for Lease Merchandise Write-Offs			97,564						67,888						63,642
Restructuring Expenses, Net			32,717						9,218						42,544
Impairment of Goodwill			12,933						—						446,893
Retirement Charges			—						—						12,634
Separation Costs			1,204						6,732						8,184
Acquisition-Related Costs			14,616						—						—
			1,164,321						1,013,740						1,469,580
OPERATING (LOSS) PROFIT			(2,548)						145,749						(386,038)
Interest Expense			(9,875)						(1,460)						(10,006)
Loss on Debt Extinguishment			—						—						(4,079)
Other Non-Operating (Expense) Income, Net			(2,320)						1,581						2,309
(LOSS) EARNINGS BEFORE INCOME TAX EXPENSE			(14,743)						145,870						(397,814)
INCOME TAX (BENEFIT) EXPENSE			(9,463)						35,936						(131,902)
NET (LOSS) EARNINGS			$	(5,280)					$	109,934					$	(265,912)
(LOSS) EARNINGS PER SHARE			$	(0.17)					$	3.33					$	(7.85)
(LOSS) EARNINGS PER SHARE ASSUMING DILUTION			$	(0.17)					$	3.26					$	(7.85)

			Year Ended December 31
(In Thousands)			2022						2021						2020
Net (Loss) Earnings			$	(5,280)					$	109,934					$	(265,912)
Other Comprehensive (Loss) Income:
Unrealized (Loss) on Fuel Hedge Derivative Instrument			(17)						—						—
Foreign Currency Translation Adjustment			(640)						58						(778)
Total Other Comprehensive (Loss) Income			(657)						58						(778)
Comprehensive (Loss) Income			$	(5,937)					$	109,992					$	(266,690)

			Treasury Stock												Common Stock												Invested Capital						Additional Paid-In Capital						Retained Earnings						Accumulated Other Comprehensive Loss						Total Equity
(In Thousands, Except Per Share)			Shares						Amount						Shares						Amount
Balance, January 1, 2020			—						$	—					—						$	—					$	837,800					$	—					$	—					$	(19)					$	837,781
Stock-Based Compensation			—						—						—						—						23,570						1,112						—						—						24,682
Net increase in Invested Capital			—						—						—						—						120,779						—						—						—						120,779
Net Loss (Earnings)			—						—						—						—						(267,793)						—						1,881						—						(265,912)
Transfer of Invested Capital to Additional Paid-in Capital			—						—						—						—						(714,356)						714,356						—						—						—
Issuance of Common Stock