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Rent-A-Center Has Q2 Loss as Revenues Fall Nearly 10%
July 27,
2017 by Larry Thomas in Economic News, Industry 
Rent-A-Center (NASDAQ: RCII) said revenues fell nearly 10% to $677.6 million in the quarter ended June 30, and the struggling rent-to-own major recorded a net loss of $8.89 million or 17 cents per share.
Part of the revenue drop was because the company has closed 225 of its core U.S. rent-to-own stores in the past year, but same-store sales also fell 10.2% in the most recent quarter.
The most recent same-store figure, however, was an improvement over the first quarter, when same-store sales tumbled 12.5%. And the company also noted that the figure improved each month during the second quarter, falling 13% in April, 9.9% in May, and 7.7% in June.
“We continued to make progress executing our strategic plan during the second quarter, delivering sequential improvements in same store sales in both the Core U.S. and Acceptance Now businesses. While we are on a positive trajectory, given the portfolio nature of the business it will take time for the results to fully materialize,” said Mark Speese, CEO. “A number of new initiatives were implemented during the quarter, which are expected to continue our positive momentum by further improving execution and enhancing the customer experience.”
Its Acceptance Now segment, which places rent-to-own kiosks in traditional retail stores, recorded a same-store sales gain of 6.7% in the most recent quarter – a figure that also improved steadily each month. The company said the segment had a same-store gain of 5.5% in April, 6% in May, and 8.6% in June.
The most recent quarterly loss reversed a profit of $9.95 million or 19 cents per share in the same quarter last year.
Rent-A-Center has been pressured in recent months by activist shareholders who want the board to sell the company, and shareholder Engaged Capital was able to oust Speese and two other board members this spring and replace them with their own candidates. However, Engaged doesn’t have a majority of the board seats, and the board has rejected at least three buyout offers in recent weeks.
“Looking forward, we are confident in our ability to fully realize the value creation opportunities of our strategic plan and we will continue to take actions that we believe are in the best interests of our stockholders,” said Speese, who remains CEO but lost his seat as board chairman.