RAC net earnings fall 20.8% as revenues rise 10.4%
By Furniture Today Staff -- Furniture Today, November 25, 2001
PLANO, Texas — Rent-A-Center said net earnings, excluding a one-time charge, fell 20.8% in the third quarter despite a 10.4% rise in revenues compared to the comparable 2000 period. Same-store revenues rose 4.5%.
Mark Speese, who took over as chairman and chief executive officer of the nearly 2,300-store rent-to-own giant in October when longtime executive Ernie Talley retired, attributed the earnings decline largely to "misguided business decisions" made earlier this year in a bid to boost revenues.
Those steps, which included shortening the recommended rental term for some merchandise, came at the expense of profit margins, he said, adding the company is moving to shore up margins by undoing some previous policies.
"Our near-term effort is on expense and gross margin management in an effort to return to the store operating margin levels we enjoyed as recently as early 2001," he said.
Net earnings in the third quarter came to $18.9 million or 50 cents per share before a one-time pretax charge of $16 million for the previously reported settlement of a class-action suit involving gender discrimination. With the charge, earnings amounted to $7.3 million or 26 cents per share.
Third-quarter revenues of $447.1 million were up from $405 million a year earlier.
Rent-A-Center projects continued revenue gains and a rise in earnings for the current quarter and next year. Fourth-quarter earnings per share are projected at 58 to 60 cents and EPS for 2002 is expected to range from $3.30 to $3.40. Earnings in the current year, before the one-time charge, are projected at $2.51 to $2.53.
| Quarter ended 9/30 | 2001 | 2000 | Change |
|---|---|---|---|
| Revenues(a) | $447,074,000 | $404,968,000 | 10.4% |
| Operating income(b) | 56,110,000 | 70,888,000 | (20.8%) |
| Net income(c) | 7,265,000 | 21,270,000 | (65.8%) |
| Earnings per share(d) | 0.26 | 0.68 | (61.8%) |
| 9 months ended 9/30 | 2001 | 2000 | Change |
| Revenues(a) | $1,329,535,000 | $1,189,739,000 | 11.8% |
| Operating income (b) | 270,787,000 | 205,171,000 | 32.0% |
| Net income(c) | 50,430,000 | 71,650,000 | (29.6%) |
| Earnings per share(d) | 1.68 | 2.30 | (27.0%) |
| (a) Includes non-rental revenues of $35.8 million in the 2001 quarter, $32.6 million in the 2000 quarter, $116.1 million in the 2001 nine months and $106.8 million in the 2000 nine months.(b) Revenues minus depreciation of rental merchandise, cost of merchandise sold, salaries and other expenses and general and administrative expenses. (c) After preferred dividends of $2.7 million in the 2001 quarter, $2.6 million in the 2000 quarter, $12.1 million in the 2001 nine months and $7.8 million in the 2000 nine months. The 2001 periods include a $16 million pretax charge for a lawsuit settlement. The 2000 nine months includes a $22.4 million pretax gain from a legal reversal. (d) Based on average shares outstanding of 37.8 million in the 2001 quarter, 35.1 million in the 2000 quarter, 37.1 million in the 2001 nine months and 34.6 million in the 2000 nine months. | |||
-
Rent-A-Center reports $36 million 4Q profit
Feb 9, 2009 -
Rent-A-Center's 4Q revenues jump 9.3%
Feb 10, 2008 -
Rental companies post higher revenues in 3Q
Nov 3, 2002 -
Rent-A-Center earnings jump
Feb 16, 2003
VIEW ALL GALLERIES
