Rent-A-Center Q2 Profit Declines - Update

(RTTNews) - Rent-A-Center Inc. (RCII), Monday reported a decline in profit for the second quarter, as revenues dropped at its core U.S. segment while operating costs increased. Earnings for the quarter beat expectations, but revenues fell short of Street estimates. Nonetheless, the company lifted its full-year 2013 earnings outlook.

The rent-to-own home appliances retailer's second-quarter profit dropped to $42.0 million from $44.2 million last year. On a per-share basis, earnings improved to $0.76 from $0.74 last year, on lower number of shares outstanding. On average, 10 analysts polled by Thomson Reuters expected earnings of $0.75 per share for the quarter. Analysts' estimates typically exclude special items.

The company said revenues grew 1.4 percent to $760.5 million from a year ago, reflecting better performance at its RAC Acceptance and international segments. Analysts expected revenues of $779.38 million for the three-month period.

Plano, Texas-based Rent-A-Center leases household durable goods to customers on a rent-to-own basis. It offers products such as consumer electronics, appliances, and computers.

Nevertheless, revenues from the company's core U.S. segment declined to $619.7 million from $654.4 million a year ago.

Same store sales for the June quarter declined 1.6 percent.

Looking ahead, the company now expects full-year 2013 earnings in the range of $3.03 to $3.15 per share, with revenue growth estimated at 3 percent. Analysts currently expect full-year earnings of $3.08 per share and revenue growth of 3.8 percent.

Previously, the company expected earnings of $2.95 to $3.10 per share and revenue growth of 3.5 to 5.5 percent.

The company also expects to open about 365 domestic RAC Acceptance kiosks and to open nearly 60 rent-to-own store locations in Mexico.

RCII closed Monday's trading at $38.59, down $0.68 or 1.73%, on the Nasdaq. The stock further dropped $1.09 or 2.82% in after-hours trade.