Rent-A-Center reports 1.4% increase in second quarter sales
Furniture Today Staff -- Furniture Today, July 23, 2013
PLANO, Texas — Rent-to-own giant Rent-A-Center posted a 1.4% increase in second quarter revenues, fueled by growth in its international and RAC Acceptance businesses.
Total revenues grew to $760.5 million for the period ended June 30, up $10.8 million from $749.7 million for the same period a year ago. Net earnings decreased 4.9% to $42 million, but diluted earnings per share increased to 76 cents from 74 cents.
Rent-A-Center's core U.S. business was a drag during the quarter with revenue declining about $34.7 million, but the company said the business continues to pick up and it's looking for positive results in the segment later this year.
RAC Acceptance, which provides a rent-to-own option for consumers at other retailers, including Nebraska Furniture Mart, Conn's and Jerome's, was a star for the quarter, with revenue growing more than 53% to more than $117 million and helping to offset the decrease in the core U.S. business.
In a release RAC Chairman and CEO Mark Speese said he was pleased with progress in the core U.S. business, noting a 6.6% increase in deliveries for the quarter and adding that the company is looking for positive same-store sales in the segment in the fourth quarter.
"Our growth initiatives continue to perform very well," he said, noting the growth in RAC Acceptance, which accounted for more than 15% of total revenues and about 23% of operating profit.
"Mexico grew revenues over 137% and ended the quarter with 130 locations," Speese added about international business.
The company said it is incorporating the benefit of a 4.6 million share repurchase as part of an accelerated stock buyback program and raising its diluted earnings per share guidance for the year to the $3.03 to $3.15 range.
For the six months, RAC's total revenues decreased 0.3% to $1.58 billion, primarily due to a decrease in core U.S. business of about $92.9 million. Same-store sales declined 3%.
Net earnings for the first six months declined to $88.5 million or $1.56 per share from $96.1 million or $1.61 per share and included dilution related to its international growth initiatives.
In guidance for the year, RAC said it is looking for flat to a 1% same-store sales increase. RAC expect to open about 365 RAC Acceptance kiosks for a net increase of 325 kiosks and also expects to open about 60 rent-to-own stores in Mexico.
The Plano, Texas-based company owns and operates about 3,120 stores in the Unites States, Canada, Mexico and Puerto Rico and about 1,155 RAC Acceptance kiosks. Its ColorTyme subsidiary is a national franchiser of about 220 ColorTyme rent-to-own stores.
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