Rent-A-Center (RCII) Prelim. Q3 Results Light of Views
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Rent-A-Center, Inc. (Nasdaq: RCII) pre-released selected preliminary unaudited financial information for the quarter ended September 30, 2016. The Company will release its full third quarter 2016 financial results on October 26, 2016.
As of the date of this release, the Company has not completed its financial statement reporting process for the quarter. During the course of that process, the Company may identify items that would require it to make adjustments, which may be material, to the information presented below. As a result, the preliminary unaudited financial information included in this release is forward-looking information and is subject to risks and uncertainties, including possible adjustments to the preliminary financial information.
Preliminary Unaudited Financial Information for Third Quarter 2016
The Company estimates Core U.S. same store sales for the three months ended September 30, 2016 to be down approximately 12%, and Acceptance Now same store sales to be essentially flat. Core U.S. gross profit, as a percent of total revenue, is estimated to be flat compared to the third quarter of last year as ongoing benefits from the changes made to the Company’s sourcing model were offset by a third-quarter clearance event focused on previously-rented product. Diluted earnings per share for the third quarter 2016 on both a GAAP basis and excluding special items are expected to be between $0.05 and $0.15.
*** NOTE: The Street was looking for Q3 revenue of $723.5 million with EPS of $0.39.
“Following the implementation of our new point-of-sale system, we experienced system performance issues and outages that resulted in a larger than expected negative impact on Core sales,” said Robert D. Davis, Chief Executive Officer of Rent-A-Center, Inc. “While we expect it to take several quarters to fully recover from the impact to the Core portfolio, system performance has improved dramatically and we have started to see early indicators of collections improvement.”
Credit Agreement Amendment
The Company recently obtained an amendment to its credit agreement which reduces the minimum Consolidated Fixed Charge Coverage Ratio from 1.75 to 1.00 to 1.50 to 1.00, beginning with the quarter ended September 30, 2016. See the Current Report on Form 8-K filed today by the Company for additional details regarding the amendment.
Third Quarter 2016 Earnings Release and Conference Call Details
The Company expects to release its full third quarter 2016 financial results on Wednesday, October 26, 2016, after the market closes. At 8:30am ET on Thursday, October 27, 2016, RCII will host a conference call to discuss the results. A live audio of the conference call will be available on the company’s investor relations website at http://investor.rentacenter.com.
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