Rent-A-Center Inc Down 0.86% To $26.87 After Earnings Beat

Thursday, February 23, 2023 - Rent-A-Center Inc (RCII) reported upside earnings and revenues today.

Rent-A-Center Inc's earnings came in at an EPS of $0.86 per share, 16.00% higher than estimates for an EPS of $0.74 per share. The firm's earnings are down 20% since reporting $1.08 per share in the same period a year ago. Remember, earnings reported were on an adjusted basis, so they may not be comparable to prior reports and/or analyst estimates.

Consensus analyst estimates were at $990.4 million. The Industrials company managed to surpass those expectations for its fourth quarter with revenue of $990.5 million, a positive revenue surprise of $80 thousand (0%). The firm managed negative 15% growth year-over-year due to Rent-A-Center Inc reporting quarterly revenue of $1.2 billion in its year-ago quarter. Rent-A-Center Inc achieved a lower earnings growth rate than revenue, signaling that the business has not been able to improve its profit margin.

The stock is down 0.86% to $26.87 after the report.

Rent-A-Center Inc's profit margins took a hit as earnings fell at a faster pace than revenues.

Wall Street Analysts had an average rating of Buy on the stock prior to the report.

Trading in the five days leading up to the report earned Rent-A-Center Inc a Bearish Sentiment Rank from InvestorsObserver.

Prior to the report, InvestorsObserver gave the stock an overall score of 33. Meanwhile, the average Wall Street analyst rated the stock a Buy.

Rent-A-Center Inc offers rent-to-own purchasing options for appliances, computers, smartphones, furniture, and related items. Customers make rental payments with the option to own the product after completing rent-to-own agreements. The company's operating segments are Rent-a-Center business, which includes company-owned stores and online platform; preferred lease, which provides lease-to-own options through third-party retailers; Mexico, which includes company-owned stores in Mexico; and franchising, which sells rental merchandise to intermediate franchisees for royalties and startup fees. The majority of revenue comes from repeat customers in the Rent-a-Center business segment of the U.S.