RAC earnings more than double
Larry Thomas -- Furniture Today, May 5, 2008
Plano, Texas — Rent-A-Center, the largest U.S. rent-to-own chain, said first quarter revenues were essentially even with last year's first quarter but profits more than doubled.
The company said same-store sales rose 2.8% due to a restructuring plan that has resulted in the closing of 315 stores during the past year.
"These positive results primarily benefited from higher merchandise sales and an earlier-than-expected benefit from our restructuring plan," said Mark Speese, chairman and CEO. "While we are mindful of the challenging macroeconomic environment we will continue ... to focus on those areas within our control, including the customer's in-store experience, collections and managing our resources effectively."
Revenues for the three months ended March 31 totaled $756.6 million, compared with $755.2 million in last year's first quarter.
Net income was $36.4 million or 54 cents per share. That compares with $15.1 million or 21 cents per share in the first quarter of 2007.
The most recent quarter included restructuring charges of $2.9 million. Last year's first quarter included a one-time charge of $51.3 million stemming from the settlement of a class-action lawsuit in New Jersey.
Rent-A-Center ended the quarter with 3,066 company owned stores — a net reduction of 15 during the quarter.
For the second quarter, which ends June 30, the company is projecting revenues of $701 million to $716 million on flat same-store sales.
Second quarter earnings are projected to be 53 cents to 59 cents per share. In the 2007 second quarter, earnings were 58 cents per share.
| Rent-A-Center | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 3/31 | 2008 | 2007 | Change |
| (a) Includes restructuring expense of $2.9 million in the 2008 quarter and litigation expense of $51.25 million in the 2007 quarter. | |||
| Revenues | $745,529,000 | $744,036,000 | 0.2% |
| Operating income | 74,263,000 | 90,180,000 | (17.7%) |
| Net income (a) | 36,358,000 | 15,103,000 | 140.7% |
| Earnings per share | 0.54 | 0.21 | 157.1% |
