After encountering problems with a new point of sales system, Rent-A-Center pre-released selected preliminary, unaudited financial results for the quarter ended September 30 that includes a substantial sales decrease.
The company estimated that core comp store sales in the U.S. for the third quarter decreased 12%, and Acceptance Now banner comps came in flat versus the period a year earlier. Rent-A-Center estimated that third quarter core U.S. gross profit, as a percent of total revenue, was essential flat year over year, bolstered by benefits from the changes made to the company’s sourcing model but hit by a third-quarter clearance event focused on previously rented product. Rent-A-Center maintained that it expects diluted earnings per share for the 2016 third quarter on both a GAAP basis and excluding special items to be between five cents and fifteen cents.
Last year, Rent-A-Center reported a GAAP third quarter loss per diluted share of eight cents, versus earnings of 49 cents for the prior-year period.
“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 Davis, Rent-A-Center CEO. “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.”
Rent-A-Center stated it would release its full third quarter 2016 financial results on October 26. The company owns and operates approximately 2,600 stores in the United States, Mexico, Canada and Puerto Rico.
