RAC Reports April Key Operating Metrics

Rent-A-Center, Inc. announces the following key operating metrics for its Core U.S. and Acceptance NOW businesses for April 2017:

Core U.S.

  • Same Store Sales: (13.0%)
  • Delinquencies: 6.5% and 40 basis points unfavorable versus prior month
  • Average Monthly Rate of New Agreements: 3.8% unfavorable versus prior year
  • Co-worker Turnover: 83.4% and 15.9 percentage points favorable versus prior year

Acceptance NOW

  • Same Store Sales: 5.5%
  • Delinquencies: 7.9% and 90 basis points favorable versus prior month

In the Core U.S. segment, Rent-A-Center’s April same store sales declined sequentially due to lower rental and fees revenues caused primarily by one less business day year-over-year. The impact of the business day reduced same store sales by approximately 4 percentage points, offsetting the positive impact seen year-to-date on improving the quality of the portfolio and recapturing the portfolio that was lost. The quality of the rental portfolio remains strong coming out of the tax season and is 140 basis points ahead of the prior year delinquency rate. In addition, the Company is beginning to see the value proposition changes and stronger assortment positively impact the average monthly rate as the year-over-year gap improved by 280 basis points sequentially. During April, the Company implemented a new profit sharing compensation program, which is expected to improve accountability and execution at the store level. The turnover number remained essentially flat sequentially; however, the gap versus last year improved. The Company is well-positioned to carry forward the positive momentum through the summer months and is encouraged by the meaningful improvements across key metrics year-to-date.

In Acceptance NOW, April same store sales continued to be positively impacted by the delay in tax refunds as merchandise sales remained close to double digits, while rental and fees was just under 5 percent. The overall comp in Acceptance NOW was not impacted from a business day perspective as they are open seven days a week in most retail partner locations. Delinquencies improved sequentially for the second month in a row due to the focus on quality sales and higher seasonality. The Acceptance NOW team has only 6.8 percent delinquencies in partners excluding Conn’s and HHGregg, down significantly from earlier in the year.

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