RAC Acceptance business lifts Rent-A-Center to 5% revenue gain
Larry Thomas -- Furniture Today, October 23, 2012
PLANO, Texas — Rent-A-Center, the nation's largest rent-to-own operator, said third-quarter revenues rose 5% on the strength of its RAC Acceptance business.
The company said total revenues for the quarter ended Sept. 30 were $739.3 million, up from $704.3 million in last year's third quarter. However, revenues for the RAC Acceptance segment, which places rent-to-own kiosks in stores that don't offer rental transactions, soared more than 60% to $83.8 million.
Revenues for its core Rent-A-Center stores in the U.S. fell 0.8% to $634.6 million in the third quarter.
Net income totaled $39.9 million or 67 cents per share. That's up from $31.2 million or 52 cents per share in last year's third quarter, a period that included $7.59 million in restructuring charges.
"We are generally pleased with the results in the quarter," said Mark Speese, chairman and CEO. "The RAC Acceptance segment continued to perform commendably ... with a gross margin of 59.3% and an operating profit of over $7 million, and ending the quarter with 882 stores."
In addition to the RAC Acceptance kiosks, the company ended the quarter with 2,983 Rent-A-Center stores and 220 franchised Colortyme locations in the U.S.
For the nine months ended Sept. 30, total revenues were $2.32 billion, up 8.4% from $2.14 billion in the first nine months of 2011.
Nine-month earnings were $136 million or $2.28 per share. That was up from $115.3 million or $1.84 per share in the first nine months of last year. The 2011 period included restructuring charges of $12.5 million and other one-time charges of $10.1 million.
The company said it is projecting total revenue growth of 7% to 8.5% for 2012, including low single-digit growth for its core U.S. stores. It is projecting revenues of more than $325 million for RAC Acceptance.
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