Rent-A-Center (RCII) Tops Q4 EPS by 15c, Revenues Beat; Offers FY18 EPS Mid-Point Guidance Above Consensus

Rent-A-Center (NASDAQ: RCII) reported Q4 EPS of $0.35, $0.15 better than the analyst estimate of $0.20. Revenue for the quarter came in at $661.75 million versus the consensus estimate of $656.78 million.

"When I returned to Rent-A-Center last January as CEO, we focused the Company’s strategy on optimizing the cost structure, increasing store traffic through an enhanced value proposition and growing our franchising business. I am extremely pleased with our 2018 results as we made substantial progress in each of those areas and exceeded our financial and operational expectations," stated Mitch Fadel, Chief Executive Officer of Rent-A-Center.

Mr. Fadel continued, “Consolidated same store sales increased by 9.1 percent in the fourth quarter and extended our streak of quarterly same store sales improvement to eight consecutive quarters. The cost savings initiatives and improved operational performance led to an increase of over $100 million in adjusted EBITDA versus 2017. The operational results coupled with working capital improvements and franchise sales helped reduce our net debt by over $220 million in 2018 and we ended the year with over $155 million of cash on the balance sheet. In 2019, we expect to further benefit from the full year impact of the cost savings initiatives implemented in 2018, which are expected to reduce costs year-over-year by approximately $50 million. Customer demand is also on a positive trajectory and we will continue to refine our value proposition with a strong focus on execution in 2019."

GUIDANCE:

Rent-A-Center sees FY2019 EPS of $1.75-$2.15, versus the consensus of $1.77. Rent-A-Center sees FY2019 revenue of $2.585-2.63 billion, versus the consensus of $2.62 billion.

For earnings history and earnings-related data on Rent-A-Center (RCII) click here.

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