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Rent-A-Center Shares Tumble After Sales, Profit Warning
October 12,
2016 by Jane Chero in Financial Reports, Industry 
Shares of Rent-A-Center (RCII) tumbled nearly 30% Tuesday after the rent-to-own powerhouse said it expects to report a 12% decline in same-store sales in its core RTO business for the third quarter.
The company’s shares closed at $9.18 on the NASDAQ Global Market, a drop of $3.70 or about 28.7%.
The shares slipped further to $9.12 in after-hours trading.
The decline occurred after a preliminary third-quarter financial report said same-store sales at its core U.S. stores declined approximately 12%, while same-store sales for its Acceptance Now division, which arranges rent-to-own transactions in many traditional retail stores, would be flat.
The company said earnings per share should be 5 cents to 15 cents, excluding special items. In last year’s third quarter, Rent-A-Center earned 47 cents per share, excluding special items.
“Following the implementation of our new point-of-sale system, we experienced system performance issues and outages that resulted in a larger than expected negative impact on Core sales,” said Robert Davis, CEO. “While we expect it to take several quarters to fully recover from the impact to the Core portfolio, system performance has improved dramatically and we have started to see early indicators of collections improvement.”
The company said it plans to release complete third-quarter results on Oct. 26.
Shares of arch-rival Aaron’s Inc. (AAN) also tumbled Tuesday, dropping nearly 11% to close at $22.81.
Aaron’s is scheduled to release third-quarter results on Oct. 28.