Digital and home sales, as well as consumers staying isolated in the COVID-19 pandemic, gave Rent-A-Center a lift in the third quarter.
The company reported net earnings of $64 million, or $1.15 per diluted share, versus $31.3 million, or 56 cents per diluted share, in the year-prior quarter. Adjusted for special items, earnings were $57.6 million, or $1.04 per diluted share, versus $26.3 million, or 47 cents per diluted share, in the 2019 period.
Rent-A-Center posted net revenues of $712 million and store revenues of $688.2 million versus $649.4 million and $634.4 million, respectively, in the year-previous quarter. Operating profit was $80.2 million versus $38.8 million in the period a year before.
In the Rent-A-Center division, operating stores in the United States, revenues were $474.2 million in the quarter, up 8.6% versus the year-earlier period, and comparable revenues were up 12.9% in the quarter year over year, driven by 71% growth in e-commerce sales.
“We’re very pleased with our third quarter performance,” said Mitch Fadel, Rent-A-Center CEO. “The changes we’ve made to support customers during this crisis have prioritized safety while further positioning the business for long-term growth, and our value proposition has never been more relevant. In the Rent-A-Center segment EBITDA growth and profitability were the strongest we’ve seen in years, driven by continued growth in e-commerce. Demand for home-related goods remains strong, and we continue to see positive trends without the benefit of further stimulus. We’ve increased our full-year guidance for 2020 and believe we’re on track to close the year with healthy lease portfolios and favorable underlying trends in our virtual and omnichannel businesses. We’re particularly excited about the progress we’re making on digital. It’s been a watershed year for digital as social distancing confirmed the strategy we were already pursuing to serve customers. Given our experience in 2020, we believe we can further harness digital to increase both overall consumer demand and our share of lease to own.”
He added, “We’re making additional investments in digital at Rent-A-Center. E-commerce is profitable and largely incremental for Rent-A-Center, and we believe there are significant opportunities to broaden our target customer demographic and drive customer retention.”