Rent-A-Center Inc. (NASDAQ:RCII) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 7.24%.
Rent-A-Center Inc. Earnings Cheat Sheet
Results: Adjusted Earnings Per Share decreased 8.05% to $0.80 in the quarter versus EPS of $0.87 in the year-earlier quarter.
Revenue: Decreased 1.91% to $819.28 million from the year-earlier quarter.
Actual vs. Wall St. Expectations: Rent-A-Center Inc. reported adjusted EPS income of $0.80 per share. By that measure, the company missed the mean analyst estimate of $0.87. It missed the average revenue estimate of $844.14 million.
Quoting Management: “I am very pleased with the progress being made in our growth initiatives,” said Mark E. Speese, the Company’s Chairman and Chief Executive Officer. “RAC Acceptance revenues were over $127 million in the quarter, an increase of 45% and now represents close to 16% of our total revenues and 20% of our total operating profit. Mexico grew revenues over 150% in the quarter and added 20 locations, ending the quarter with 110 stores,” Speese continued. “Our Core U.S. business faced macro headwinds in the quarter. In addition to our portfolio of agreements in our Core U.S. business being down year-over-year going into the first quarter, we believe our Core U.S. business was negatively impacted by the delayed issuance of federal income tax refunds, rising fuel prices and higher payroll taxes,” Speese added. “Trends in recent weeks have shown a period-over-period improvement in demand. Nevertheless, the quarter ending portfolio remains below our expectations and, as a result, we are lowering our guidance for the remainder of 2013. We believe we are on the right strategic path and will continue to improve execution in each of our business segments and I remain optimistic about our future,” Speese concluded.
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