North America's largest rent-to-own operator, Rent-a-Center (RCII -0.52%), reported first-quarter results yesterday that fell short of Wall Street's expectations on both the top and bottom lines, and caused the company to lower guidance from its previous estimates.
Rent-a-Center reported revenues of $819.3 million, down 2% from the year-ago period and below consensus estimates of $844.1 million. Earnings of $0.80 per share were also below last year's $0.87 per share, which is what Wall Street was anticipating for this quarter as well.
That led the rent-to-own specialist to offer sharply lower guidance for the full year. The outlook it provided in January estimated earnings per share in the range of $3.25 to $3.40. However, it now expects them to be in the range of $2.95 to $3.10 per share, with both forecasts inclusive of approximately $0.25-per-share dilution related to its international growth initiatives..
Rent-a-Center CEO Mark E. Speese said, "Trends in recent weeks have shown a period-over-period improvement in demand. Nevertheless, the quarter ending portfolio remains below our expectations and, as a result, we are lowering our guidance for the remainder of 2013. We believe we are on the right strategic path and will continue to improve execution in each of our business segments and I remain optimistic about our future."
Through March 31, Rent-a-Center generated operating cash flows of approximately $113.5 million and ended the quarter with $82.3 million of cash on hand. It repurchased 465,035 shares in the first quarter at a cost of about $17.4 million. Since the inception of the buyback program, the company has repurchased a total of 31.6 million shares and has utilized approximately $794.8 million of the $1 billion authorized by its board of directors.
