After announcing that it was acquiring Merchants Preferred, an online leasing business, Rent-A-Center posted a strong second quarter.
The company reported net earnings of $94.45 million, or $1.70 per diluted share, and adjusted net earnings, excluding special items, of $33.5 million, or 60 cents per diluted share, in the year-earlier period. The results compare with $13.8 million, or 25 cents per diluted share, and $25.6 million, or 47 cents per diluted share, respectively, in the year-before quarter.
Rent-A-Center topped a second quarter MarketBeat-published analyst consensus earnings per diluted share estimate by four cents.
Comparable sales increased 5.8% in the quarter year over year. On a total revenue basis, the gain was offset by the refranchising of more than 100 locations since the 2018 first quarter and closures of certain core Rent-A-Center stores in the U.S.
Total revenues were $655.9 million versus $655 .7 million in the year-previous quarter. Operating profit was $129.8 million and adjusted operating profit was $52.3 million, versus $27.2 million and $43.6 million, respectively, in the quarter a year prior.
“Another solid quarter of results on both the top and bottom lines proves the execution of our strategic plan has been a success,” said Mitch Fadel, Rent-A-Center CEO. “Consolidated same stores sales increased 5.8%, and our value proposition changes together with cost savings initiatives continue to drive strong EBITDA improvements.”
Fadel added, “Additionally, we are very excited about our recently announced agreement to acquire Merchants Preferred, a nationwide virtual rent-to-own provider. The transaction is expected to close in August, and we believe this acquisition accelerates our existing virtual rent-to-own capabilities. Our improved financial health and the pending acquisition will be a growth catalyst for us in the over $20 billion dollar virtual rent-to-own market in the coming years.”