Rent-A-Center Announces Selected Preliminary Third Quarter 2016 Financial Information
Rent-A-Center, one of the largest rent-to-own operators in North America, today pre-released selected preliminary unaudited financial information for the quarter ended September 30, 2016. The Company will release its full third quarter 2016 financial results on October 26, 2016.
As of the date of this release, the Company has not completed its financial statement reporting process for the quarter. During the course of that process, the Company may identify items that would require it to make adjustments, which may be material, to the information presented below. As a result, the preliminary unaudited financial information included in this release is forward-looking information and is subject to risks and uncertainties, including possible adjustments to the preliminary financial information.
Preliminary Unaudited Financial Information for Third Quarter 2016
The Company estimates Core U.S. same store sales for the three months ended September 30, 2016 to be down approximately 12%, and Acceptance Now same store sales to be essentially flat. Core U.S. gross profit, as a percent of total revenue, is estimated to be flat compared to the third quarter of last year as ongoing benefits from the changes made to the Company’s sourcing model were offset by a third-quarter clearance event focused on previously-rented product. Diluted earnings per share for the third quarter 2016 on both a GAAP basis and excluding special items are expected to be between $0.05 and $0.15.
“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 D. Davis, Chief Executive Officer of Rent-A-Center, Inc. “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.”
Credit Agreement Amendment
The Company recently obtained an amendment to its credit agreement which reduces the minimum Consolidated Fixed Charge Coverage Ratio from 1.75 to 1.00 to 1.50 to 1.00, beginning with the quarter ended September 30, 2016. See the Current Report on Form 8-K filed today by the Company for additional details regarding the amendment.
Third Quarter 2016 Earnings Release and Conference Call Details
The Company expects to release its full third quarter 2016 financial results on Wednesday, October 26, 2016, after the market closes. At 8:30am ET on Thursday, October 27, 2016, RCII will host a conference call to discuss the results. A live audio of the conference call will be available on the company’s investor relations website at http://investor.rentacenter.com.
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 approximately 2,600 stores in the United States, Mexico, Canadaand Puerto Rico, and approximately 1,915 Acceptance Now kiosk locations in the United Statesand Puerto Rico. Rent-A-Center Franchising International, Inc., a wholly owned subsidiary of the Company, is a national franchiser of approximately 225 rent-to-own stores operating under the trade names of “Rent-A-Center,” “ColorTyme,” and “RimTyme.”