Rent-A-Center Provides Business Update

9/21/20

PLANO, Texas--(BUSINESS WIRE)--Rent-A-Center, Inc. (NASDAQ/NGS: RCII) today provided a business update, guidance for the third quarter of 2020 and increased guidance for the full year of 2020.

“Our business is continuing to perform very well driving better than expected financial results,” said Mitch Fadel, Chief Executive Officer. “Lease portfolio performance and customer payment activity have remained strong in both businesses even without additional government stimulus. While some uncertainty remains related to the pandemic, we are providing expectations for the third quarter and increasing guidance for 2020 given our continued strong performance and our improved outlook.”

Third Quarter Guidance

Consolidated Results

  • The Company expects consolidated revenues to be between $695 million and $715 million, Adjusted EBITDA between $85 million and $95 million, and Non-GAAP diluted earnings per share between $0.95 and $1.05.

Rent-A-Center Business

  • For the Rent-A-Center Business, revenues are expected to be between $465 million and $475 million and Adjusted EBITDA between $100 million and $105 million.
  • Same store sales are expected to be between 10 and 12% for the third quarter.
  • Skip/stolen losses for the third quarter are expected to be approximately 2% of revenue. The Company continues to believe its skip/stolen loss reserves do not require any adjustments for potential adverse trends related to the pandemic.

Preferred Lease

  • For the Preferred Lease business, revenues are expected to be between $190 million and $200 million and Adjusted EBITDA between $15 million and $20 million.
  • Invoice volume growth is expected to be approximately 35% for the third quarter on a year over year basis, sequentially better than the 25% growth in the second quarter.
  • Skip/stolen losses in the third quarter are expected to be between 11% and 12% of revenue. The Company believes it has adequately reserved for potential adverse trends related to the pandemic and does not anticipate incremental pandemic related charges to be taken in the third or fourth quarters.

Updated 2020 Guidance (1)

The Company has increased full year 2020 guidance and now expects the following consolidated results:

  • Revenues of $2.780 to $2.830 billion
  • Adjusted EBITDA of $295 to $320 million (2)
  • Non-GAAP diluted earnings per share of $3.15 to $3.45 (2)
  • Free Cash Flow of $155 to $180 million (2)

(1) Includes Rent-A-Center Business, Preferred Lease, Mexico, Franchise and Corporate segments; guidance does not include the impact of new franchising transactions.

(2) Non-GAAP financial measure. See descriptions below in this release. Because of the inherent uncertainty related to the special items discussed below, management does not believe it is able to provide a meaningful forecast of the comparable GAAP measures or reconciliation to any forecasted GAAP measure without unreasonable effort.

About Rent-A-Center, Inc.

Rent-A-Center, Inc. (NASDAQ: RCII) is an industry leading omni-channel lease-to-own provider for the credit constrained customer. The Company focuses on improving the quality of life for its customers by providing access and the opportunity to obtain ownership of high-quality, durable products via small payments over time under a flexible lease-purchase agreement and no long-term debt obligation. Preferred Lease provides virtual and staffed lease-to-own solutions to retail partners in stores and online enabling our partners to grow sales by expanding their customer base utilizing our differentiated offering. The Rent-A-Center Business and Mexico segments provide lease-to-own options on products such as furniture, appliances, consumer electronics, and computers in approximately 2,100 Rent-A-Center stores in the United States, Mexico, and Puerto Rico and on its e-commerce platform, Rentacenter.com. The Franchising segment is a national franchiser of approximately 370 franchise locations. Rent-A-Center is headquartered in Plano, Texas. For additional information about the Company, please visit our website at Rentacenter.com or Investor.rentacenter.com.

Recent Deals

Interested in advertising your deals? Contact Edwin Warfield.