Rent-A-Center Grows Consolidated Same Store Sales 7.5%

July 29, 2015  by in Economic News, Industry   

Its consolidated total revenues increased 6.1 percent to $815.3 million and same store sales increased 7.5 percent more than the prior year. For the six months ended June 30, Rent-A-Center generated $189.2 million of cash from operations, capital expenditures totaled $42.9 million, and it ended the second quarter with $70.5 million of cash and cash equivalents. 

“We continue to see progress toward transforming our core business and profitability growing Acceptance Now,” said Robert Davis, CEO of Rent-A-Center. “Our core U.S. business had a second consecutive quarter of positive same store sales, and lower costs helped us achieve improved profitability. Our Flexible Labor and Sourcing and Distribution initiatives have only just started to roll out which we believe will drive significant benefits in the back half of the year. The annualized run rate savings of these two initiatives alone is expected to be $45 to $60 million.” 

Acceptance Now same store sales increased 31.6 percent, driven by the continued maturation of the business and the introduction of 90-day option pricing. During the quarter, 48 Acceptance Now staffed locations and 10 direct locations were opened, 20 staffed locations were closed, and one staffed location was converted to a direct location. 

Rent-A-Center’s Flexible Labor initiative includes a new model that has been introduced in approximately 800 core U.S. locations and remains on track to generate $20 to $25 million of annual run rate savings by mid 2016. All five distribution centers are fully operational in its Sourcing and Distribution initiative, and Rent-A-Center expects to see $25 to $35 million of annual run rate product cost savings by year’s end. The income statement benefit of these savings is expected to be fully realized by the end of 2016.