Charges lead to 22.9% earnings decline at Rent-A-Center
Revenues rise 6% as demand remains strong
Larry Thomas -- Furniture Today, October 25, 2011
PLANO, Texas — Rent-A-Center, the nation's biggest rent-to-own operator, said third-quarter earnings fell 22.9% due largely to restructuring charges related to store closings.
Revenues increased 6% and same-store sales were up 2%.
"Our results for the quarter were excellent in this very challenging economy as the demand for our products and services remained strong," said Mark Speese, chairman and CEO. "Both our core rent-to-own and RAC Acceptance businesses reflected this customer demand in the quarter, with the company's 2% same-store sales growth split evenly between the two businesses."
Net income for the quarter ended Sept. 30 was $31.2 million or 52 cents per share. That's down from $40.5 million or 62 cents per share in last year's third quarter.
The most recent quarter included a restructuring charge of $7.6 million related to the closing of 26 Rent-A-Center stores as well as eight Home Choice stores and 24 RAC Limited locations in grocery stores that had been operated on a test basis.
The company ended the quarter with 2,923 rent-to-own stores, 721 RAC Acceptance kiosk locations and 35 Home Choice stores in the U.S.
Third-quarter revenues totaled $704.3 million, up from $664.6 million in last year's third quarter.
Revenues for the nine months ended Sept. 30 totaled $2.14 billion, up 4.4% from $2.05 billion in the same quarter last year.
Nine-month net income was $115.3 million or $1.84 per share. That's down 17.5% from $139.8 million or $2.13 per share in last year's third quarter.
The company said revenues for the full year should be $3.128 billion to $3.198 billion. Full-year earnings are projected at $3.10 to $3.30 per share.
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