Rent-A-Center 4Q Revenue Up

January 31, 2011  by in UnCategorized   

By Home Furnishings Business in Rent-To-Own on February 1, 2011

Rent-to-own furniture retailer Rent-A-Center (NASDAQ-GS: RCII) reported fourth-quarter 2010 revenue of $677.1 million, a slight increase over the prior-year period.

Plano, Texas-based Rent-A-Center noted that while same store sales were flat, rentals and fees from its RAC Acceptance business rose $5.5 million in the period.

Net earnings and net earnings per diluted share for the three months ended Dec. 31, were $31.9 million and $0.49, respectively, compared with $43.7 million and $0.66, respectively, for the same period in the prior year.

"We had excellent results in the fourth quarter," said Mark E. Speese, the company's chairman and CEO. "In our core rent-to-own business, customer demand remained strong with our best gain in customer agreements in years and improvement in our margins with our continued focus on expense control. As to our growth initiatives, we accelerated the expansion of our RAC Acceptance business with the acquisition of 158 kiosk locations from The Rental Store and have more than doubled our expected 2011 kiosk openings. We also successfully entered the Mexico market with the opening of five stores during the fourth quarter. In addition to these growth initiatives, we anticipate expanding in Canada, testing other retail concepts and investing in technology in an effort to continue to improve the top line and drive additional efficiencies."

For the 2010 year, total revenues of $2.732 billion were off $20.0 million from 2009's $2.752 billion. This decrease in revenues was attributable to the November 2009 divestiture of dPi Teleconnect, LLC, the company's subsidiary engaged in the prepaid telecommunications and energy business, which had contributed approximately $50.5 million in merchandise sales in 2009. Same store sales for 2019, excluding financial services revenue, decreased 0.4 percent. Net earnings and net earnings per diluted share for 2010 were $171.6 million and $2.60, respectively, compared with $167.9 million and $2.52, respectively, for 2009.

Looking ahead, Rent-A-Center expects first-quarter 2011 total revenues in the range of $745 million to $765 million; same store sales to increase between 1.5 percent and 2.5 percent; 10 domestic rent-to-own store openings; the addition of around 100 domestic RAC Acceptance kiosks; and the opening of about five rent-to-own locations in Mexico.