Rent-A-Center quarterly earnings up 11.1%

Revenue declines 5.5% in second period

Furniture Today Staff -- Furniture Today, July 28, 2009

PLANO, Texas — Cost controls and a focus on margin improvement helped Rent-A-Center post an 11.1% gain in second-quarter earnings compared with the same period a year earlier, despite a 5.5% decline in revenues, the rent-to-own giant reported Monday.

The company said it earned $41.9 million or 63 cents per share in the quarter on revenue of $679.6 million. Rent-A-Center said the revenue decline mainly resulted from a 6.2% decline in same-store revenues, partly attributable to a 2007 store consolidation plan.

The current year's second quarter included a credit of $1.9 million or 2 cents per share regarding earlier litigation. With that excluded, adjusted earnings per share amounted to 61 cents, an increase of 8.9% from 56 cents a year earlier.

"We are pleased that our customer traffic in the quarter exceeded our expectations," said Mark Speese, chairman and CEO. "However, our average price per customer agreement was lower than expected in the second quarter, which we believe reflected our customer's discretion in this difficult economy."

But he said that the company's "expense management initiatives, focus on margin improvement and prudent use of cash will positively impact earnings for the year. As a result, we are increasing our guidance for 2009 diluted earnings per share to $2.32 to $2.42."

For the first half of this year, revenue was down 0.5% to $1.4 billion while earnings were up 17.8% to $87.3 million or $1.41 per share.