Rent-A-Center 4Q revenues up 7%
By Furniture Today Staff -- Furniture Today, February 15, 2004
PLANO, Texas — Newly opened and acquired stores drove a 7% revenue gain in the fourth quarter for Rent-A-Center as earnings rose 13.9% from the comparable 2002 period, the company said.
For all of 2003, the largest U.S. rent-to-own retailer said revenues grew 10.9% from the previous year to $2.2 billion and earnings were up 12.1%.
"We are pleased with our fourth quarter results, where we saw increases in both revenues and earnings, as well as continued strength in our cash flow," said Mark Speese, chairman and CEO. Cash flow of $39.5 million in the quarter and $339.5 million for the year helped RAC capitalize on growth opportunities, he said.
Rent-A-Center added a net 241 new stores last year, with openings, acquisitions and consolidations. It plans to close within 60 days on the recently announced acquisition of 124-store competitor Rainbow Rentals.
Comparable-store revenues in the fourth quarter rose just 0.2% from a year earlier, and President Mitch Fadel said that was partly due to "planned cannibalization" as new and acquired stores opened in the same markets as existing units. Rent-A-Center's strategy allows it to increase earnings even with flat comps, he said.
Earnings per share rose 24% in the fourth quarter, with a stock buyback program reducing the number of shares outstanding. For the year, EPS rose 9.5% to $2.08.
Excluding a non-recurring finance charge of $21.7 million after taxes, 2003 earnings came to $2.33 per share, a 22.6% rise from the previous year.
Rent-A-Center operates 2,653 company-owned stores and is a national franchiser of 325 other stores, most of which operate under the ColorTyme name.
This year, management said it expects revenue growth in the 6% to 7.4% range and earnings per share of $2.62 to $2.70, a gain of 26% to 30% from 2003.
Initiatives Rent-A-Center is pursuing this year include a plan to offer discounts to McDonald's employees, which is just now rolling out to the restaurant chain's franchisees.
| Rent-A-Center | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are loses or declines. | |||
| Quarter ended 12/31 | 2003 | 2002 | Change |
| (a) Includes non-rental revenues of $55.4 million in the 2003 quarter, $49.7 million in the 2002 quarter, $229.2 million in the 2003 year and $181.5 million in the 2002 year. (b) Revenues minus direct store expenses, franchise operation expenses and general and administrative expenses. (c) After preferred dividends of $1,000 in the 2002 quarter and $10.2 million in the 2002 year. (d) Includes a $35.3 million pretax non-recurring finance charge. |
|||
| Revenues (a) | $558,659,000 | $522,213,000 | 7.0% |
| Operating income (b) | 92,151,000 | 91,672,000 | 0.5% |
| Net income | 51,499,000 | (c)45,217,000 | 13.9% |
| Earnings per share | 0.62 | 0.50 | 24.0% |
| Year ended 12/31 | 2003 | 2002 | Change |
| Revenues (a) | $2,228,150,000 | $2,010,044,000 | 10.9% |
| Operating income (b) | 382,534,000 | 355,494,000 | 7.6% |
| Net income | 181,496,000 | (c)161,961,000 | 12.1% |
| Earnings per share | 2.08 | 1.90 | 9.5% |
-
Rent-A-Center reports slight 2Q revenue gain
Aug 27, 2006 -
Rent-A-Center's 3Q revenues up slightly
Nov 13, 2005 -
RAC 4Q profit down 25.2%
Feb 26, 2006 -
RAC reports revenue gain of 11.7% in 2Q
Aug 4, 2002
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