In a solid second quarter, Rent-A-Center managed its business through the challenges of the pandemic to meet changing consumer lifestyle preferences.
Net earnings for the quarter were $38.5 million, or 70 cents per diluted share, versus $94.5 million, or $1.70 per diluted share, in the year-previous period. Adjusted for one-time events, net earnings were $44.1 million, or 80 cents per share, versus $33.5 million, or 60 cents per share, in the quarter a year before.
A MarketBeat-published analyst consensus second quarter estimate was for 60 cents per diluted share.
Total revenues were $683.7 million versus $655.9 million in the quarter a year earlier, while total store revenues were $661.2 million versus $641 million in the year-prior period. Operating profit was $53.6 million versus $129.8 million, in the quarter a year earlier.
Mitch Fadel, Rent-A-Center CEO, said, “Second quarter performance significantly exceeded expectations. We called on every part of the organization to meet the immediate challenges brought by the pandemic, and our agility, speed, and execution paid off. We are on track to deliver revenue, adjusted EBITDA, and non-GAAP diluted EPS for 2020 within the original guidance ranges we outlined at the beginning of the year prior to the pandemic, and are increasing our previous free cash flow guidance. The results underscore the critical role we serve for customers, and the strides we’re making to improve their experience should benefit Rent-A-Center for years to come. The Rent-A-Center business achieved its strongest adjusted EBITDA margin in several years, driven by operating expense control, share gains from a pullback in traditional lending and further adoption of e-commerce and digital payments. Same-store sales were positive in each month of the quarter, with furniture and appliance sales back to pre-pandemic trends.”
He added that the company’s Preferred Lease operations, “generated 25% growth in invoice volume despite extensive store closures in the second quarter, with a strong acceleration in May and June. The mix of high-quality customers should continue to drive revenue and portfolio performance, and we’re excited about investments we’ve made to drive national account growth and introduce more verticals to our best-in-class model. We believe the changes to the way our customers live and work are here to stay. Our focus will remain on strategically managing our business to increase value for customers and retail partners. We’ll continue to use and enhance technology to deepen our engagement and believe our resilient model and focus on innovation position us well for what’s ahead.”