Rent-A-Center Beats Estimates, Raises Guidance

The company said its results came in better than expected and it expects to see more.

Author:: Michael Dunn
Publish date:: Apr 30, 2002 9:55 AM EDT

Rent-A-Center

said its first-quarter results came in well ahead of estimates on strong sales, and the company raised its guidance for the rest of the year.

The rent-to-own operator posted first-quarter net income of $43.6 million, or $1.20 a share, a 74% increase over last year's $25 million, or 69 cents a share. On a pro forma basis revising last year's results to exclude the effects of goodwill amortization, the company's 2002 first-quarter earnings were 39.5% higher than the year-ago quarter.

According to Thomson Financial/First Call, Wall Street analysts were looking for Rent-A-Center to earn $1.02 a share in the quarter.

Total revenue increased to $498.6 million from $439.7 million last year, primarily due to better-than-expected same-store sales growth of 7.7%.

In a press release, the company said its focus on profitability and expense management combined with strong demand for rental services and products led to the quarter's growth.

Rent-A-Center also raised its second-quarter and full-year guidance, saying it now expects revenue of $478.5 million to $488.5 million for the second quarter, with same-store sales increasing 3.5% to 5.5%. The company also expects to open 10 to 15 new store locations in the quarter. For the full year, the company raised its guidance to EPS of $4.30 to $4.40 on total revenue of $1.94 billion to $1.99 billion, ahead of analyst estimates of EPS of $3.88 on revenue of $1.86 billion.

Shares of Rent-A-Center were recently trading up about 11% to $61.20 after closing at $55.25 Monday.