Rent-A-Center revenues rise 2.8% in fourth quarter
Larry Thomas -- Furniture Today, January 28, 2013
PLANO, Texas — Rent-A-Center, the nation's largest operator of rent-to-own stores, said fourth-quarter revenues rose 2.8%, but profits fell slightly because of weakness in its international segment.
The top line was aided by a strong performance from its RAC Acceptance segment, which places kiosks in retail stores that typically don't offer rent-to-own transactions.
Total revenues for the quarter ended Dec. 31 totaled $758.4 million, up from $737.5 million in the previous year's fourth quarter. Revenues from its core Rent-A-Center stores fell 2.9% to $638.7 million, but RAC Acceptance revenues soared 51% to $94.7 million.
Net income for the quarter totaled $47.5 million or 81 cents per share. That's down from $49.3 million or 83 cents per share in the previous year's fourth quarter.
Net income for the full year, however, rose 11.5% to $183.5 million or $3.09 per share.
Full-year revenues totaled $3.08 billion, an increase of 7% from $2.88 billion in 2011. The company said the bulk of the growth came from RAC Acceptance, where revenues leaped 77% in 2012 to $343 million.
"We are generally pleased with our overall 2012 results as we achieved total revenues growth of 7% and over a 6% increase in net earnings per diluted share," said Mark Speese, chairman and CEO. "The core rent-to-own business generated total revenue growth of 1% (while) RAC Acceptance continued to generate impressive results."
Speese said the RAC Acceptance segment, which had 966 kiosks in operation at the end of last year, had an operating profit of more than $28 million.
"In 2013, we intend to continue focusing on keeping the core business strong and further investing in our strategic initiatives, while continuing to return value to our shareholders through dividends and opportunistic stock repurchases," Speese added.
For 2013, Rent-A-Center is projecting total revenue growth of 5% to 8%, including revenues of about $540 million from RAC Acceptance.
Earnings are projected at $3.25 to $3.40 per share, including about 25 cents per share from international growth initiatives.
As of Dec. 31, the company had 2,986 Rent-A-Center stores in the U.S., in addition to the 966 RAC Acceptance kiosks. The company also had 108 international stores and 224 franchised ColorTyme locations.