In the first quarter, Rent-A-Center worked through a changing marketplace as the COVID-19 pandemic wanes and managed to beat Wall Street estimates even if earnings stumbled.
Adjusted for one-time events, net earnings were $44.5 million, or 74 cents per diluted share, versus $87.7 million, or $1.32 per diluted share, in the 2021 period.
Rent-A-Center topped MarketBeat-published analyst consensus estimates for adjusted diluted earnings per share of 71 cents and revenue of $1.11 billion.
The company posted net revenue of $1.16 billion and store revenue of $1.13 billion versus $1.04 billion and $997 million in the period a year prior.
First-quarter 2022 revenue at Rent-A-Center stores was $518.5 million down 1.2% year-over-year on a 1.1% decrease in comparable sales primarily due to lower merchandise sales and early payout options in the quarter versus a prior-year period that benefited from government stimulus programs, the company maintained. Revenue at the company’s recently required least-to-own/buy now pay later business Acima was $599.4 million versus $457.4 million in the year-earlier quarter while that at Rent-A-Center’s Mexico business was $15.7 million versus $14.5 million and that at the franchising operation was $26.1 million versus $40 million.
E-commerce accounted for 23.4% of revenue versus 22.3% in the year-past quarter.
Operating profit was $11 million versus $70 million in the year-previous quarter.
“With the Rent-A-Center Business segment showing good momentum, highlighted by 22% two-year same-store sales growth, and progress at Acima, with the previously announced leadership transition and recent underwriting adjustments showing improvements in risk and yield indicators, we are encouraged by our start to 2022,” said Mitch Fadel, Rent-A-Center CEO, in announcing the financial results. “Furthermore, with revenues and earnings above the midpoint of our first quarter guidance ranges, we believe the company is on track to achieve our targets for the year. We continue to believe the virtual lease-to-own space offers tremendous growth opportunities, and we are taking a deliberate approach to advance multiple growth initiatives as they emerge. Importantly, we think the combination of Acima’s growth potential with the Rent-A-Center Business segment’s stability and strong cash generation offers a highly compelling model that can create significant value over the long-term.”
