Rent-A-Center, Inc. Reports September Key Operating Metrics
Core U.S.
- Same Store Sales: (4.2%)
- Delinquencies: 6.9%, 30 basis points favorable versus prior month, 270 basis points favorable versus prior year
- Average Monthly Rate of New Agreements: 14.9% favorable versus prior year
- Co-worker Turnover: 86.6% and 22.0 percentage points favorable versus prior year
Acceptance NOW
- Same Store Sales: 8.1%
- Delinquencies: 11.2%, 90 basis points unfavorable versus prior month, 250 basis points unfavorable versus prior year
In the Core U.S. segment, September same store sales improved sequentially for the fifth consecutive month, with an increase of 110 basis points, and a total year-to-date increase of 850 basis points, due to the improvements driven by the Company’s strategic plan. As a result of the impact of recent hurricanes, the Company instituted a change to the same store sales store selection in its reporting, excluding geographically impacted regions for 18 months. This change will ensure that the same store sales figure is consistent and accurately reflects the underlying performance of the business.
Delinquencies have been stable at approximately 7 percent since late in the second quarter, down 270 basis points in September versus last year. As part of its strategic plan, the Company has started the process of charging off late-stage delinquent customers earlier in the month to improve workforce efficiency. These efforts to refine account management practices benefitted the delinquencies numbers in September by approximately 40 basis points.
Turnover continues to be significantly lower than 2016 and improved sequentially in September as the Company continues to refine the programs aimed at hiring and retaining store level coworkers. The more tenured workforce coupled with the improvements in feedback and training puts the Company in a better position to drive agreement volume entering the holiday season.
In Acceptance NOW, same store sales continue to show positive results.
Same store sales currently represents about one-third of all staffed
locations, excluding new stores, locations impacted by transferred
agreements and locations impacted by the hurricanes. Delinquencies were
at 11.2 percent in September, and 9.9 percent excluding Conn’s and
The Company is assessing and implementing strategies aimed at improving the Acceptance NOW business model, including an enhanced value proposition expected to increase ownership and improve return on investment. There continue to be significant efforts around optimizing partner relationships. Additionally, several decision engine enhancements aimed at improving ownership and decreasing losses have been implemented this year but will take time to materially impact the portfolio performance.
The Company scheduled its third quarter earnings call for
Metric Definitions
Core U.S.
- Same Store Sales - year over year revenue performance on comparable stores
- Delinquencies - percent of customer agreements greater than 7 days past due
- Average Monthly Rate of New Agreements - average monthly rental rate for agreements originated in the period
- Co-worker Turnover - annualized year to date store co-worker turnover
Acceptance NOW
- Same Store Sales - year over year revenue performance on comparable stores
- Delinquencies - percent of customer agreements, in staffed locations, greater than 32 days past due
About
A rent-to-own industry leader,
Forward-Looking Statements
This press release and the guidance above contain forward-looking
statements that involve risks and uncertainties. Such forward-looking
statements generally can be identified by the use of forward-looking
terminology such as “may,” “will,” “expect,” “intend,” “could,”
“estimate,” “should,” “anticipate,” “believe,” or “confident,” or the
negative thereof or variations thereon or similar terminology. The
Company believes that the expectations reflected in such forward-looking
statements are accurate. However, there can be no assurance that such
expectations will occur. The Company's actual future performance could
differ materially from such statements. Factors that could cause or
contribute to such differences include, but are not limited to: the
general strength of the economy and other economic conditions affecting
consumer preferences and spending; factors affecting the disposable
income available to the Company’s current and potential customers;
changes in the unemployment rate; difficulties encountered in improving
the financial and operational performance of the Company’s business
segments; the Company’s chief executive officer and chief financial
officer transitions, including the Company’s ability to effectively
operate and execute its strategies during the interim period and
difficulties or delays in identifying and/or attracting a permanent
chief financial officer with the required level of experience and
expertise; failure to manage the Company’s store labor and other store
expenses; the Company’s ability to develop and successfully execute
strategic initiatives; disruptions, including capacity-related outages,
caused by the implementation and operation of the Company’s new store
information management system, and its transition to more-readily
scalable, “cloud-based” solutions; the Company’s ability to develop and
successfully implement digital or E-commerce capabilities, including
mobile applications; disruptions in the Company’s supply chain;
limitations of, or disruptions in, the Company’s distribution network;
rapid inflation or deflation in the prices of the Company’s products;
the Company’s ability to execute and the effectiveness of a store
consolidation, including the Company’s ability to retain the revenue
from customer accounts merged into another store location as a result of
a store consolidation; the Company’s available cash flow; the Company’s
ability to identify and successfully market products and services that
appeal to its customer demographic; consumer preferences and perceptions
of the Company’s brand; uncertainties regarding the ability to open new
locations; the Company’s ability to acquire additional stores or
customer accounts on favorable terms; the Company’s ability to control
costs and increase profitability; the Company’s ability to retain the
revenue associated with acquired customer accounts and enhance the
performance of acquired stores; the Company’s ability to enter into new
and collect on its rental or lease purchase agreements; the passage of
legislation adversely affecting the Rent-to-Own industry; the Company’s
compliance with applicable statutes or regulations governing its
transactions; changes in interest rates; adverse changes in the economic
conditions of the industries, countries or markets that the Company
serves; information technology and data security costs; the impact of
any breaches in data security or other disturbances to the Company's
information technology and other networks and the Company’s ability to
protect the integrity and security of individually identifiable data of
its customers and employees; changes in the Company’s stock price, the
number of shares of common stock that it may or may not repurchase, and
future dividends, if any; changes in estimates relating to
self-insurance liabilities and income tax and litigation reserves;
changes in the Company’s effective tax rate; fluctuations in foreign
currency exchange rates; the Company’s ability to maintain an effective
system of internal controls; the resolution of the Company’s litigation;
and the other risks detailed from time to time in the Company’s
View source version on businesswire.com: http://www.businesswire.com/news/home/20171020005134/en/
Source:
Rent-A-Center, Inc.
Daniel O’Rourke, 972-801-1104
VP -
Finance, Investor Relations and Treasury
InvestorRelations@rentacenter.com