Share this on

One-time charges send Rent-A-Center profits down 27%

Fourth-quarter revenues rise 0.6% to $677.1 million

Larry Thomas -- Furniture Today, February 1, 2011

PLANO, Texas — A pair of one-time charges totaling more than $22 million caused profits at Rent-A-Center to fall 27% in the fourth quarter.

The fourth-quarter profit of $31.9 million, or 49 cents per share, included an $18.9 million impairment charge stemming from the closing of its financial services business and a $3.1 million charge related to the repayment a portion of its term loans.

Without those charges, the company would have recorded earnings of 71 cents per share, a 7.6% increase over the 66 cents per share earned in the comparable period in 2009.

Revenues for the quarter ended Dec. 31 were $677.1 million, up 0.6% from the fourth quarter of 2009, when revenues were $672.9 million. Same-store sales for the quarter, excluding financial services revenue, were flat.

"We had excellent results in the fourth quarter," said Mark Speese, chairman and CEO. "In our core rent-to-own business, customer demand remained strong with our best gain in customer agreements in years and improvement in our margins with our continued focus on expense control."

For the full year, revenues were $2.73 billion, a 0.7% drop from $2.75 billion in 2009. Same-store sales, excluding financial services revenue, were down 0.4%.

Profits for 2010 totaled $171.6 million or $2.60 per share. That's an increase of 2.3% from $167.9 million or $2.52 per share in 2009.

For 2011, Rent-A-Center is projecting revenues of $2.87 billion to $2.93 billion, with a same-store sales increase of 1.5% to 2.5%. Earnings for the year are projected at $2.90 per share to $3.10 per share.

As of Dec. 31, the company had 2,943 Rent-A-Center stores and 384 RAC Acceptance kiosks in the U.S. The company said it expects to add 25 rent-to-own stores and 275 to 325 kiosks in 2011.

Share this on

Rent-A-Center 4Q Earnings Fall 27% Because of Charges

Apr 6, 2011

Also by this author

Also by Larry Thomas

Featured Company

Wright Labels

Bill and Tom Wright founded Wright of Thomasville in 1961 on the idea that printing was a creative medium and the belief that "a promise made is a promise kept." The Wright brothers focused their attention on providing exceptional printing for the... more