Rent-A-Center's Q3 Outlook Disappoints
Rent-A-Center Inc (NASDAQ: RCII) warned that its profit for the third quarter would fall short of expectations.
The company expects both GAAP and adjusted EPS between $0.05 and $0.15 for the third quarter. This is significantly lower than the Street estimate of $0.39.
Rent-A-Center indicated that its core same-store sales in the United States would likely drop about 12 percent and that Acceptance Now same -store sales would be essentially flat.
The company estimates core gross profit to be flat driven by gains from the changes made to the sourcing model.
CEO, Robert Davis, commented, "Following the implementation of our new point-of-sale system, we experienced system performance issues and outages that resulted in a larger than expected negative impact on Core sales. While we expect it to take several quarters to fully recover from the impact to the Core portfolio, system performance has improved dramatically and we have started to see early indicators of collections improvement."
The stock closed Monday's trading at $12.88.
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