Rent-A-Center, Inc. Reports June Key Operating Metrics
July 18 2017 - 9:00AM
Business Wire
Rent-A-Center, Inc. (the “Company”) (NASDAQ/NGS: RCII) today
announced the following preliminary key operating metrics for its
Core U.S. and Acceptance NOW (“ANow”) businesses for June 2017:
Core U.S.
- Same Store Sales: (7.7%)
- Delinquencies: 7.1%, 60 basis points
unfavorable versus prior month
- Average Monthly Rate of New Agreements:
5.7% favorable versus prior year
- Co-worker Turnover: 86.1% and 19.5
percentage points favorable versus prior year
Acceptance NOW
- Same Store Sales: 8.6%
- Delinquencies: 8.1%, 90 basis points
unfavorable versus prior month
In the Core U.S. segment, June same store sales improved
sequentially as the initiatives put in place continue to make a
positive impact on the size and quality of the rental portfolio.
Delinquencies, which were favorable by 410 basis points versus
prior year, were higher sequentially primarily due to seasonality.
In addition, while there were some calendar differences on a
monthly basis throughout the quarter versus prior year, second
quarter 2017 same stores sales were approximately 350 basis points
ahead of the low point in fourth quarter 2016.
Looking ahead, the Company’s new assortment strategy of
providing access to aspirational products will continue to build,
given the average product stays in the system for over eighteen
months. For example, in the second quarter the Company’s inventory
purchases were comprised of over 65 percent aspirational products
but only half of the sales made in second quarter 2017 were
aspirational products. Both of these data points were well ahead of
prior quarters. The Company is also leveraging its more stable
workforce to improve the customer experience through a new mystery
shopper program that will provide the sales force feedback on in
store, web and phone based customer interactions. In addition to
this pointed feedback, detailed training is being integrated into
the tool to further improve on those opportunities.
In Acceptance NOW, same store sales remain higher than last year
due to a larger portfolio in those respective locations. The growth
of the portfolio is being aided by a younger, still maturing store
base and stronger average ticket driven by actions taken to
optimize the value proposition. As a reminder, the same store sales
store base is comprised of only about 40% of Acceptance NOW
locations due to the recent Conn’s and HH Gregg closures.
Delinquencies were unfavorable month over month primarily due to
the higher seasonality and the transferred agreements from closed
stores.
Metric Definitions
Core U.S.
- Same Store Sales - year over year
revenue performance on comparable stores
- Delinquencies - percent of customer
agreements greater than 7 days past due
- Average Monthly Rate of New Agreements
- average monthly rental rate for agreements originated in the
period
- Co-worker Turnover - annualized year to
date store co-worker turnover
Acceptance NOW
- Same Store Sales - year over year
revenue performance on comparable stores
- Delinquencies - percent of customer
agreements, in staffed locations, greater than 32 days past
due
About Rent-A-Center,
Inc.
A rent-to-own industry leader, Plano, Texas-based,
Rent-A-Center, Inc., is focused on improving the quality of life
for its customers by providing them the opportunity to obtain
ownership of high-quality, durable products such as consumer
electronics, appliances, computers, furniture and accessories,
under flexible rental purchase agreements with no long-term
obligation. The Company owns and operates stores in the United
States, Mexico, Canada and Puerto Rico, and Acceptance NOW kiosk
locations in the United States and Puerto Rico. Rent-A-Center
Franchising International, Inc., a wholly owned subsidiary of the
Company, is a national franchiser of rent-to-own stores operating
under the trade names of “Rent-A-Center,” “ColorTyme,” and
“RimTyme.” For additional information about the Company, please
visit our website at www.rentacenter.com.
Forward-Looking
Statements
This press release and the guidance above contain
forward-looking statements that involve risks and uncertainties.
Such forward-looking statements generally can be identified by the
use of forward-looking terminology such as “may,” “will,” “expect,”
“intend,” “could,” “estimate,” “should,” “anticipate,” “believe,”
or “confident,” or the negative thereof or variations thereon or
similar terminology. The Company believes that the expectations
reflected in such forward-looking statements are accurate. However,
there can be no assurance that such expectations will occur. The
Company's actual future performance could differ materially from
such statements. Factors that could cause or contribute to such
differences include, but are not limited to: the general strength
of the economy and other economic conditions affecting consumer
preferences and spending; factors affecting the disposable income
available to the Company’s current and potential customers; changes
in the unemployment rate; difficulties encountered in improving the
financial and operational performance of the Company’s business
segments; the Company’s chief executive officer and chief financial
officer transitions, including the Company’s ability to effectively
operate and execute its strategies during the interim period and
difficulties or delays in identifying and/or attracting a permanent
chief financial officer with the required level of experience and
expertise; failure to manage the Company’s store labor and other
store expenses; the Company’s ability to develop and successfully
execute strategic initiatives; disruptions, including
capacity-related outages, caused by the implementation and
operation of the Company’s new store information management system,
and its transition to more-readily scalable, “cloud-based”
solutions; the Company’s ability to develop and successfully
implement digital or E-commerce capabilities, including mobile
applications; disruptions in the Company’s supply chain;
limitations of, or disruptions in, the Company’s distribution
network; rapid inflation or deflation in the prices of the
Company’s products; the Company’s ability to execute and the
effectiveness of a store consolidation, including the Company’s
ability to retain the revenue from customer accounts merged into
another store location as a result of a store consolidation; the
Company’s available cash flow; the Company’s ability to identify
and successfully market products and services that appeal to its
customer demographic; consumer preferences and perceptions of the
Company’s brand; uncertainties regarding the ability to open new
locations; the Company’s ability to acquire additional stores or
customer accounts on favorable terms; the Company’s ability to
control costs and increase profitability; the Company’s ability to
retain the revenue associated with acquired customer accounts and
enhance the performance of acquired stores; the Company’s ability
to enter into new and collect on its rental or lease purchase
agreements; the passage of legislation adversely affecting the
Rent-to-Own industry; the Company’s compliance with applicable
statutes or regulations governing its transactions; changes in
interest rates; adverse changes in the economic conditions of the
industries, countries or markets that the Company serves;
information technology and data security costs; the impact of any
breaches in data security or other disturbances to the Company's
information technology and other networks and the Company’s ability
to protect the integrity and security of individually identifiable
data of its customers and employees; changes in the Company’s stock
price, the number of shares of common stock that it may or may not
repurchase, and future dividends, if any; changes in estimates
relating to self-insurance liabilities and income tax and
litigation reserves; changes in the Company’s effective tax rate;
fluctuations in foreign currency exchange rates; the Company’s
ability to maintain an effective system of internal controls; the
resolution of the Company’s litigation; and the other risks
detailed from time to time in the Company’s SEC reports, including
but not limited to, its Annual Report on Form 10-K for the year
ended December 31, 2016, and its Quarterly Report on Form 10-Q
for the quarter ended March 31, 2017. You are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date of this press release. Except as required
by law, the Company is not obligated to publicly release any
revisions to these forward-looking statements to reflect the events
or circumstances after the date hereof or to reflect the occurrence
of unanticipated events.
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version on businesswire.com: http://www.businesswire.com/news/home/20170718005440/en/
Rent-A-Center, Inc.Daniel O’Rourke, 972-801-1104VP - Finance,
Investor Relations and
TreasuryInvestorRelations@rentacenter.com
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