Rent-A-Center reports slight 2Q revenue gain
By Furniture Today Staff -- Furniture Today, August 13, 2006
Plano, Texas — Rent-A-Center, the largest U.S. rent-to-own company, reported modest revenue gains in the second quarter and six months, driven by same-store sales increases of 1.1% in the latest quarter and 1.4% in the six months.
Measured against comparable 2005 periods that included special credits, profits in the 2006 quarter and six months were off 4.5% and 10.3%, respectively.
Revenues of $583.6 million in the latest quarter were up 0.5% from the year-ago period. Quarterly net income fell from $41.7 million to $39.8 million.
In the latest six months, revenues were up 0.7% to just under $1.2 billion, and net profits slipped to $80.2 million from $89.4 million last year.
Both 2005 periods included a special pretax $2 million tax audit reserve credit, and the 2005 six months also included an $8 million pretax credit for a litigation reversal. Excluding these credits, and also reflecting a reduction in the number of shares outstanding, earnings per share in 2006 increased 7.7% in the quarter and 5.6% in the six months.
During the latest quarter, Rent-A-Center opened nine stores, acquired 16 stores as well as accounts from 15 additional locations, consolidated 19 stores into existing locations and sold 12 stores, for a net reduction of six stores and an ending balance of 2,749 stores.
In the current quarter, the company expects total revenues to be in a range of $584 million to $592 million, with a same-store sales increase in the 2.5% to 3.5% range. RAC expects to open five to 15 RTO stores in the quarter.
| Rent-A-Center | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 6/30 | 2006 | 2005 | Change |
| (a) Includes non-rental revenues of $56.5 million in the 2006 quarter, $53.9 million in the 2005 quarter, $143.1 million in the 2006 six months and $137.1 million in the 2005 six months. (b) Revenues minus direct store expenses, franchise operation expenses and general and administrative expenses. (c) Includes a $2 million tax audit reserve credit in both periods. The 2006 six months also includes an $8 million pretax credit for a litigation settlement. (d) Based on average shares outstanding of 70.6 million in the 2006 quarter, 70.4 million in the 2006 six months and 76 million in the 2005 periods. |
|||
| Revenues (a) | $583,623,000 | $580,578,000 | 0.5% |
| Operating income (b) | 76,143,000 | 75,143,000 | 1.3% |
| Net income | 39,843,000 | (c)41,742,000 | (4.5%) |
| Earnings per share (d) | 0.56 | 0.55 | 1.8% |
| 6 months ended 6/30 | 2006 | 2005 | Change |
| Revenues (a) | $1,190,598,000 | $1,182,387,000 | 0.7% |
| Operating income (b) | 152,513,000 | 155,432,000 | (1.9%) |
| Net income | 80,171,000 | (c)89,411,000 | (10.3%) |
| Earnings per share (d) | 1.14 | 1.18 | (3.4%) |
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