One-time charges send Rent-A-Center income down 14.1%
First-quarter revenues grow 3.3% to $742.2 million
Larry Thomas -- Furniture Today, April 26, 2011
PLANO, Texas — Rent-A-Center, the nation's largest rent-to-own operator, said a pair of one-time charges reduced first-quarter profits by 14.1%.
The company said net income of $44.2 million or 69 cents per share included a $7.3 million charge related to the shutdown of its financial services business, and a $2.8 million litigation expense stemming from the recent settlement of lawsuit regarding California wage and hour laws.
Without the charges, net income would have been $50.6 million or 79 cents per share.
In last year's first quarter, net income was $51.5 million or 77 cents per share.
In the most recent quarter, revenues totaled $742.2 million, up 3.3% from $718.4 million in last year's first quarter. Same-store revenues edged up 0.1%.
"Our first quarter was negatively impacted by February results that ended poorly; however, the business has bounced back nicely in March and April," said Mark Speese, chairman and CEO. "Our core rent-to-own portfolio ended the first quarter near our original forecast."
Speese said the company is reaffirming its revenue estimate for 2011. Revenues are projected to range from $2.87 billion to $2.93 billion, while same-store sales are projected to increase 1.5% to 2.5%.
He said the company expects to open about 25 Rent-A-Center stores in the U.S. this year, another 40 to 75 in Mexico and 10 to 20 in Canada.
As of March 31, the company had 2,949 stores in the U.S., 18 in Canada and 10 in Mexico. In addition, it had about 208 franchised ColorTyme rent-to-own stores.
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