Rent-Way purchase spurs RAC 2Q sales
By Furniture Today Staff -- Furniture Today, August 19, 2007
Plano, Texas — Rent-A-Center, the largest U.S. operator of rent-to-own stores, said second-quarter sales were 24.1% ahead of the comparable period last year, mainly because of its acquisition of rival operator Rent-Way.
Same-store sales, from stores open one year or more, rose 2.7%.
Net income for the quarter was $41.3 million or 58 cents per share. That was 3.8% ahead of the comparable period last year.
However, the company's stock price fell by about 19% after it reported results, mainly because RAC also cut its earnings per share estimate for this year to a range of $2.06 to $2.14, down from the previous forecast of $2.24 to $2.32.
"Although our second- quarter financial results for revenue and earnings were within our guidance range ... the business environment has been very challenging of late," said Mark Speese, chairman and CEO. "We believe that the financial challenges facing our customers have increased recently, resulting in a softer outlook for the balance of the year."
Sales for the quarter totaled $724.2 million, up from $583.6 million in last year's second quarter, which concluded before the Rent-Way acquisition was closed.
Sales for the first half of 2007 totaled $1.48 billion, a 24.2% increase from the first half of 2006. Same-store sales were up 2.8%.
First-half net income totaled $56.4 million, or 79 cents per share, after a one-time charge of $51.3 million related to settlement of a class-action suit in New Jersey. In 2006, first-half income was $80.2 million, or $1.14 per share.
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Acquisition boosts Rent-A-Center’s sales 24.1%
Jul 31, 2007
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