Rent-A-Center's second-quarter revenues up 4%
July 26, 2011-- Furniture Today,
Earnings declined 16.6% to $39.9 million or 63 cents per share, partly because of a one-time $4.9 million charge in connection with lease terminations after its December acquisition of The Rental Store. Without the charge, earnings would have been 68 cents per share, still about 6% below the comparable quarter last year.
Same-store revenues decreased 0.3% in the latest quarter.
"Our results for the quarter for our total revenues and earnings were within our expectations," said Mark Speese, Rent-A-Center chairman and CEO. "Our core rent-to-own customer demand outperformed the comparable period in 2010 even though our customers remain financially constrained by higher fuel and food prices.
"The revenue from our growth initiatives continues to perform well with RAC Acceptance contributing close to 6% of our total store revenue. We believe our investment in these growth initiatives will provide both revenue and earnings growth in the future," he added.
RAC Acceptance is the company's program of offering rent-to-own transactions to consumers who don't qualify for financing from a traditional retailer. These kiosks are located within those traditional retailers' stores.
Speese said the company also repurchased 2.1 million of its shares during the quarter, and noted that as reported in May, it will boost its quarterly stock dividend to 16 cents in the third quarter from 6 cents previously.
Looking ahead, the company said it projects revenues of $691 million to $706 million in the third quarter, up from $664.6 million in the same period last year, with same-store sales growing 0.5% to 1.5%. Earnings per share are expected to be in the range of 55 cents to 61 cents per share, compared with 62 cents last year.
Plano-based Rent-A-Center operates about 3,020 company-owned stores nationwide and in Canada, Mexico and Puerto Rico. The company's ColorTyme subsidiary is a national franchiser of another 210 RTO stores.