Isn't it funny? When Rent-A-Center (NASDAQ:RCII) management has to report an unsatisfactory quarter, fuel costs are a big problem. But when results are good (and this quarter's results were decent), suddenly we hear things like "we believe the customer has adjusted to the current level of fuel costs."

Be that as it may, Rent-A-Center does continue to lift itself out of the hole it dug and fell in prior to 2006. Total revenue growth of less than 1% was nothing too special, but same-store sales growth of 1.1% was welcome. What's more, operating income rose 3%, and the company's free cash flow generation capabilities continue to be very attractive.

The good news/bad news here is that Rent-A-Centers blanket the country pretty thoroughly. That's bad in the sense that it limits the potential for growth simply from opening new stores. It's good, though, in the sense that anything that it can do to drive higher sales or lower costs out of existing stores should have a disproportionately positive impact on profits and cash flow.

Payday lending would seem to be one such opportunity. If it is able to push payday lending through all of its stores (something that I'm not sure is possible, given various state laws), it'll be a major player in this market -- bigger, in terms of stores, than AdvanceAmerica (NYSE:AEA), First Cash Financial (NASDAQ:FCFS), ACE Cash Express (NASDAQ:AACE), and so on. Payday lending is perpetually controversial, but it's lucrative when done right, and it could definitely turn into a high-margin line for Rent-A-Center.

In the meantime, I suggest investors keep a sharp eye on this company. Management is a little too quick with the "it's not our fault" excuses, and I have a pretty hefty stack of emails from employees of Rent-A-Center telling me just how bad things are or were. By the same token, roses don't grow out of the sweetest-smelling earth, so as long as the earnings and cash flows are trending in the right direction (to say nothing of the stock price), it's hard to find fault with this as a cash-rich value idea.

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Fool contributor Stephen Simpson owns shares of First Cash Financial but has no financial interest in any other stocks mentioned (that means he's neither long nor short the shares).