Rent-A-Center Tops Q1 Expectations, Shares Surge

Shares of

jumped more than 8 percent in after-hours trading after the company reported upbeat results for the first quarter on Monday. The Plano, Texas-based company reported quarterly earnings of $27.3 million, or $0.51 per share, compared to $27.3 million, or $0.51 per share, in the year-ago period. Excludng non-recurring items, the company's earnings slipped to $0.52 per share from $0.56 per share. Its revenue gained 5.9 percent year-over-year to $877.6 million in the period. However, analysts were expecting a profit of $0.50 per share on revenue of $863.33 million. Core U.S. revenue dropped 1.1 percent year-over-year to $629.2 million in the first quarter, while Acceptance Now revenue climbed 32.5 percent to $224.3 million. MEXICO revenue gained 13.1 percent in the quarter. Its same store sales climbed 8.0 percent, while core U.S. same store sales rose 1.0 percent during the quarter. Acceptance Now same store sales jumped 34.1 percent in the quarter. Rent-A-Center declared a dividend of $0.24 per share in the first quarter. Rent-A-Center ended the quarter with $93.1 million in cash and cash equivalents. The average estimate among 14 Estimize users was for earnings of $0.52 per share and revenue of $858.99 million. "Our multi-year plan to improve the profitability and performance of our Core business continues to build momentum on a number of fronts," said Robert D. Davis, the Chief Executive Officer of Rent-A-Center, Inc. "In the first quarter, same store sales in the Core swung to the positive, labor costs are lower, we are underway with the margin-driving Flexible Labor and Supply Chain initiatives, and we have taken significant steps to manage smartphone losses." Rent-A-Center shares climbed 8.21 percent to $29.26 in the after-hours trading session.