8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported):July 22, 2008

AARON RENTS, INC.

(Exact name of Registrant as Specified in its Charter)

Georgia	1-13941	58-0687630
(State or other Jurisdiction of Incorporation or Organization)	(Commission File Number)	(IRS Employer Identification No.)

309 E. Paces Ferry Road, N.E. Atlanta, Georgia	30305-2377
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code: (404) 231-0011

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On July 22, 2008, Aaron Rents, Inc. issued a press release to announce its financial results for the second quarter of 2008. A copy of the press release is attached as Exhibit 99.1.

The press release presents the Company's net earnings and diluted earnings per share from the second quarter of 2008 to the comparable period in 2007 excluding the gain from the sales of stores in 2008. As dispositions of a significant number of stores to a single purchaser are not common occurrences in the Company's businesses, management believes that presentation of these particular non-GAAP financial measures are useful because they allow investors to more easily evaluate and compare the performance of the Company's core sales and lease ownership and corporate furnishings businesses from period to period. Non-GAAP financial measures however should not be considered in isolation or as an alternative to financial measures calculated and presented in accordance with GAAP, such as the Company's GAAP basis net earnings and diluted earnings per share, which are also presented in the press release.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(a)	Financial Statements of Businesses Acquired:
	None.
(b)	Pro Forma Financial Information:
	None.
(d)	Exhibits:

Exhibit No.	Description
99.1	Aaron Rents, Inc. press release dated July 22, 2008, announcing the Company’s financial results for the second quarter of 2008 (furnished pursuant to Item 2.02 of Form 8-K).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

AARON RENTS, INC.
By:	/s/ Gilbert L. Danielson
	Gilbert L. Danielson Executive Vice President, Chief Financial Officer

Date: July 22, 2008

EX-99.1

Contact: Gilbert L. Danielson

Executive Vice President

Chief Financial Officer

404-231-0011

Aaron Rents, Inc.

Reports Second Quarter Results;

Revenues Up 15%;

Same Store Revenues Up 4.1%;

EPS Up 19%;

Raises Earnings Guidance For Year

ATLANTA, July 22, 2008 - Aaron Rents, Inc. (NYSE: RNT), the nation’s leader in the sales and lease ownership, specialty retailing and rental of residential and office furniture, consumer electronics and home appliances and accessories, today announced revenues and earnings for the three months ended June 30, 2008.

For the second quarter of 2008, revenues rose 15% to $411.2 million compared to $359.0 million for the second quarter of 2007. Net earnings were $23.3 million versus $19.7 million for the same period a year ago, an 18% increase. Diluted earnings per share were up 19% to $.43 compared to $.36 per share last year.

For the first six months of this year, revenues were up 14% to $848.5 million compared to $746.9 million for the first six months of 2007. Net earnings for the first half of 2008 were $48.0 million versus $48.9 million for the corresponding period last year. Diluted earnings per share for the first six months were $.89 for both 2008 and 2007.

Included in the Company’s other revenues in the second quarter of 2008 was a $3.4 million gain from the sale of four Company-operated stores to a franchisee and the rental accounts of three stores to a third party operator. Excluding this gain, net earnings on a non-GAAP basis for the second quarter of 2008 would have been $21.2 million, or $.39 per diluted share. The Company also recorded a $2.3 million gain included in other revenues in the first quarter of 2008 relating to the sale of Company-operated stores to franchisees. Included in the Company’s other revenues in the first six months of 2007 was a $4.9 million gain from the sale in last year’s first quarter of a parking deck at the Company’s corporate headquarters. See the attached table for a reconciliation of revenues, net earnings, and diluted earnings per share to non-GAAP revenues, earnings, and diluted earnings per share excluding the aforementioned asset sales.

“We feel our second quarter results are exceptional,” said R. Charles Loudermilk, Sr., Chairman of Aaron Rents. “The Company continues to grow and we are pleased that we service the large market of credit-constrained consumers who need and desire our products and services even in these difficult economic times.”

“Our goal is to continue to grow the business and at the same time increase profitability,” added Robert C. Loudermilk, Jr., President and Chief Executive Officer of Aaron Rents. “In the second quarter we saw an improvement in same store revenues, collection efforts and overall store level execution, and our profitability exceeded expectations. Earnings for the quarter were positively impacted by better performance even with the start-up expenses associated with the opening of new stores negatively impacting results by approximately $.06 per diluted share.”

Aaron’s Sales & Lease Ownership division second quarter revenues increased 16% to $381.4 million compared to $327.6 million last year. First six months sales and lease ownership revenues also increased 16% to $787.7 million compared to the $678.8 million of a year ago.

Same store revenues (revenues earned in Company-operated stores open for the entirety of both periods) in the Aaron’s Sales & Lease Ownership division increased 4.1% during the second quarter of 2008 compared to the same quarter a year ago.

Consolidated rentals and fees for the second quarter and first half advanced 14% and 13% over the comparable previous year periods, respectively. In addition, franchise royalties and fees were up 13% for the second quarter and 12% year-to-date. Non-retail sales, which are primarily sales of rental merchandise to Aaron’s Sales & Lease Ownership franchisees, increased to $66.1 million for the second quarter from $56.7 million in the comparable period in 2007 and to $151.5 million for the first six months compared to $126.9 million for the first six months last year. The increases in the Company’s franchise revenues and the shipments of non-retail sales are the result of the increase in revenues of the Company’s franchisees, who collectively had revenues of $160.3 million during the second quarter and $327.7 million for the first six months of 2008, an 18% and 15% increase, respectively, over the prior year periods. Same store revenues for franchised stores were up 16.1% for the second quarter compared to the same quarter last year. Revenues of franchisees, however, are not revenues of Aaron Rents, Inc.

During the second quarter the Aaron’s Sales & Lease Ownership division opened six new Company-operated stores, 14 new franchised stores, one Company-operated RIMCO store and one franchised RIMCO store. The division also closed nine Company-operated and four franchised stores during the quarter, merging their operations with other existing stores. In addition, the Company acquired 17 franchised stores, acquired one store and the rental accounts of six other stores from unrelated rental companies, sold four Company-operated stores to a franchisee, and sold the rental accounts of three other stores to another rental operator. The Company also closed two corporate furnishings stores during the quarter.

Through the three months and six months ended June 30, the Company awarded area development agreements to open 29 and 79 additional franchised stores, respectively. At the end of June there were a total of 285 franchised stores awarded that are expected to open over the next several years.

At June 30, 2008 the Aaron’s Sales & Lease Ownership division had 993 Company-operated stores, 480 franchised stores, 30 Company-operated RIMCO stores, and seven franchised RIMCO stores. In addition, the Company operated 60 corporate furnishings stores.

“During the first six months of 2008 we have continued to open new stores but also have bought and sold numerous stores in transactions with franchisees as well as closing a total of 29 Company-operated and seven franchised stores, merging their operations with other stores. These actions were done to improve profitability and we will continue to evaluate the need for additional mergers and realignments throughout the year,” Mr. Loudermilk, Jr. continued.

“As a result of these realignment efforts, we anticipate that we will now open approximately 55 to 65 new Company-operated stores and 55 to 65 new franchised stores this year, a somewhat smaller number than previously forecasted. Our guidance for the third quarter of 2008 is to expect revenues in excess of $405 million and diluted earnings per share in the range of $.32 to $.37. For the entire 2008 year we continue to expect Company revenues of approximately $1.7 billion (excluding revenues of franchisees) and are raising our previous diluted earnings per share range of guidance of $1.40 to $1.55 for the year to $1.54 to $1.64, primarily due to the improving trends in our performance and market opportunity. We anticipate a 10% to 13% overall store square footage growth in 2009.”

Aaron Rents will hold a conference call to discuss its quarterly financial results on Wednesday, July 23, 2008, at 10:30 am Eastern Time. The public is invited to listen to the conference call by webcast accessible through the Company’s website, www.aaronrents.com, in the “Investor Relations” section. The webcast will be archived for playback at that same site.

Aaron Rents, Inc., based in Atlanta, currently has more than 1,570 Company- operated and franchised stores in 48 states and Canada. The Company’s MacTavish Furniture Industries division manufactured in 2007 approximately $73 million at cost of furniture, bedding and accessories at 12 facilities in five states. The entire production of MacTavish is for shipment to Aaron Rents stores.

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: Statements in this news release regarding Aaron Rents, Inc.’s business which are not historical facts are “forward-looking statements” that involve risks and uncertainties which could cause actual results to differ materially from those contained in the forward-looking statements. These risks and uncertainties include factors such as changes in general economic conditions, competition, pricing, customer demand and other issues, and the risks and uncertainties discussed under “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007. Statements in this release that are “forward-looking” include without limitation Aaron Rents’ projected revenues, earnings, and store openings for future periods.

Aaron Rents, Inc. and Subsidiaries

Consolidated Statements of Earnings

(In thousands, except per share amounts)

	(Unaudited)				(Unaudited)
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2008		2007		2008		2007
Revenues:
Rentals and Fees	$	315,679	$	277,927	$	635,517	$	563,724
Retail Sales		13,246		12,514		30,395		28,140
Non-Retail Sales		66,072		56,654		151,489		126,907
Franchise Royalties and Fees		10,894		9,602		21,933		19,516
Other		5,300		2,288		9,188		8,632
Total		411,191		358,985		848,522		746,919
Costs and Expenses:
Retail Cost of Sales		8,774		8,484		19,796		18,791
Non-Retail Cost of Sales		60,574		52,130		138,470		116,260
Operating Expenses		190,897		163,737		382,899		325,414
Depreciation of Rental Merchandise		110,902		101,063		224,499		204,114
Interest		2,375		1,896		4,810		3,785
Total		373,522		327,310		770,474		668,364
Earnings Before Taxes		37,669		31,675		78,048		78,555
Income Taxes		14,390		12,018		30,016		29,691
Net Earnings	$	23,279	$	19,657	$	48,032	$	48,864
Earnings Per Share	$	.44	$	.36	$	.90	$	.90
Earnings Per Share Assuming Dilution	$	.43	$	.36	$	.89	$	.89
Weighted Average Shares Outstanding		53,262		54,191		53,377		54,176
Weighted Average Shares Outstanding Assuming Dilution		54,076		55,065		54,062		55,046

Selected Balance Sheet Data

(In Thousands)

	(Unaudited)
	June 30,		December 31,
	2008		2007
Cash	$	5,990	$	5,249
Accounts Receivable, Net		49,543		52,025
Rental Merchandise, Net		687,745		623,452
Property, Plant and Equipment, Net		241,046		247,038
Other Assets, Net		206,659		185,412
Total Assets		1,190,983		1,113,176
Bank Debt		109,786		82,884
Senior Notes		80,000		80,000
Total Liabilities		476,013		439,796
Shareholders’ Equity	$	714,970	$	673,380

Reconciliation of Revenues, Net Earnings and Earnings per Share

Excluding Asset Sales of Stores and Parking Deck

(In thousands, except per share amounts)

	(Unaudited)				(Unaudited)
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2008		2007		2008		2007
Total Revenues	$	411,191	$	358,985	$	848,522	$	746,919
Less Revenues from Store Asset Sales		3,427		-		5,750		-
Less Revenues from Parking Deck Sale		-		-		-		4,878
Revenues Excluding Sales		407,764		358,985		842,772		742,041
Net Earnings		23,279		19,657		48,032		48,864
Less Gain from Store Asset Sales		2,118		-		3,539		-
Less Gain from Parking Deck Sale		-		-		-		3,034
Net Earnings Excluding Gain From Sales	$	21,161	$	19,657	$	44,493	$	45,830
Earnings Per Share Excluding Gain from Sales	$	.40	$	.36	$	.83	$	.85
Earnings Per Share Assuming Dilution Excluding Gain from Sales	$	.39	$	.36	$	.82	$	.83
Weighted Average Shares Outstanding		53,262		54,191		53,377		54,176
Weighted Average Shares Outstanding Assuming Dilution		54,076		55,065		54,062		55,046