RTO Furniture Retailer Rent-A-Center Reports on 1st QuarterApril 27, 2010
Rent-to-own furniture retailer Rent-A-Center (NASDAQ/NGS: RCII), Plano, Texas, reported a first-quarter 2010 revenue decrease of $9.8 million to $718.4 million.
The decrease in revenues was primarily attributable to the November 2009 divestiture of Rent-A-Center's subsidiary engaged in the prepaid telecommunications and energy business. Same store sales for the quarter ended March 31 were down 0.5 percent compared with the prior-year period.
Despite lower revenue, first-quarter 2010 net earnings were $51.5 million, as compared with $45.4 million for the same period in the prior year. The increase resulted from $3 million in pre-tax litigation credits.
Net earnings per diluted share for the quarter ended March 31, 2010 were $0.77, as compared to adjusted net earnings per diluted share of $0.65, when excluding the pre-tax litigation credit above, for the quarter ended March 31, 2009, an increase of 18.5%.
"We are pleased to report another quarter of outstanding results, as we exceeded our total revenues and earnings guidance," said Mark E. Speese, chairman and CEO. "This was primarily due to continued strong customer demand while maintaining a strong cost discipline. Due to the strong trends in our customer traffic, our continued focus on the customer's in-store experience as well as our expense management initiatives, we are pleased to announce increased earnings expectations for 2010 of between $2.60 and $2.80 per diluted share for 2010."
Looking ahead to the second quarter, Rent-A-Center expects total revenues in the range of $670 million to $685 million.
Store rental and fee revenues are expected to be between $588 million and $598 million; total store revenues between $662 million to $677 million; and same store sales to rise around 1 percent.
The company expects to open f to 10 new company-owned store locations in the second quarter; and to add financial services to approximately 20 rent-to-own store locations.
For fiscal 2010, Rent-A-Center expects total revenues in the range of $2.725 billion and $2.780 billion; store rental and fee revenues from $2.335 billion to $2.380 billion; total store revenues from $2.693 billion and $2.748 billion; and
same store sales to increase from between 1 percent and 2 percent.
The company expects to open 25 to 35 new company-owned store locations in fiscal 2010; and expects to add financial services to approximately 70 rent-to-own store locations.