Rent-A-Center boosts profits 10% in third quarter
Revenues decline slightly due to divestiture
Larry Thomas -- Furniture Today, October 26, 2010
PLANO, Texas — Rent-A-Center, the nation's largest chain of rent-to-own stores, said third quarter profits were nearly 10% ahead of last year's third quarter, despite a slight decrease in revenues.
The company, which had 2,942 stores as of Sept. 30, said consumer demand was strong throughout the quarter, and it expected demand to remain that way at least through the end of the year.
"We had a very strong quarter as both our earnings and revenues exceeded our expectations," said Mark Speese, chairman and CEO. "Customer demand remained strong ... with total deliveries outperforming the comparable period in 2009."
Total revenues for the quarter were $664.6 million, down from $671.3 million in last year's third quarter. Speese said the decline was due largely to the November 2009 divestiture of dPi Teleconnect, a subsidiary that sold prepaid phone cards.
Third-quarter net income totaled $40.5 million or 62 cents per share. That compares with $36.8 million or 55 cents per share in the same quarter last year.
Although the company only plans to add about 10 Rent-A-Center stores in the fourth quarter, it expects to add about 70 locations to its fast-growing RAC Acceptance kiosk business. The kiosks, which are placed in traditional retail stores, offer rent-to-own transactions to consumers who do not qualify for in-store financing.
Rent-A-Center had kiosks in 151 locations on Sept. 30, including 48 that were opened during the third quarter.
For the nine months ended Sept. 30, revenues were $2.054 billion, down 1.3% from $2.079 billion in the first nine months of 2009.
Nine-month earnings came to $139.8 million or $2.13 per share. That compares with $124.2 million or $1.88 per share in the first nine months of last year.
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