Rent-A-Center revenues rise 12.5% in first quarter

Jay McIntosh -- Furniture Today, April 24, 2012

PLANO, Texas — Rent-A-Center said its first-quarter revenues were up 12.5% from a year ago, with gains in both its core U.S. store segment and from its RAC Acceptance kiosks in traditional retail stores.

Earnings were up 17.4% to $51.9 million or 87 cents per share, although excluding one-time charges in the 2011 quarter, the increase was just 2.7%. Earnings per share excluding the charges, however, were up 10.1% from 79 cents a year earlier.

Same-store revenues for the rent-to-own merchant were up 7.1% in the quarter.

"We delivered excellent results in the quarter, as we reported both record total revenues and earnings," said Mark Speese, chairman and CEO. "Total revenue and same-store sales benefited in the quarter from more customers than expected exercising their early purchase option. However, this does not create recurring revenue.

"The demand for our products and services remained steady in the quarter. We believe we are well positioned with our marketing and advertising plans in place to continue to drive customer traffic," he said.

Earnings in the 2011 first quarter were reduced by a $7.3 million pre-tax impairment charge for the closing of the company's financial services business, and by a $2.8 million pre-tax expense for settling litigation over wage and hour claims in California.

At the end of the quarter, Rent-A-Center operated about 3,070 stores in the U.S., Canada, Mexico and Puerto Rico, and had about 756 RAC Acceptance kiosks, which are in retail stores and offer the rent-to-own transactions to consumers who do not qualify for traditional financing options. The company's ColorTyme subsidiary also franchises about 220 independently owned RTO stores.