"Our 2004 earnings were negatively affected by the weakness in our same store sales, which we believe reflects, among other things, higher fuel and energy costs that ultimately suppressed customer demand," said Mark E. Speese, CEO and chairman of Rent-A-Center, adding that in the near future the company hopes to drive more customer traffic with new marketing and advertising campaigns.

Looking ahead, the company expects a decrease in comp-store sales in the first quarter of this year of 3.5% to 4.5%, partly because of a quirk in the calendar. "With last year being leap year, we're losing a Friday this quarter, which is a big revenue day for us," said Mitchell E. Fadel, president and COO of the company, during Tuesday's earnings conference call, referring to the fact that Q1 2004 had 13 Fridays, while Q1 2005 will only have 12. "That has a negative effect on our comps of about 1.7% during the quarter. Later in 2005, however, we're certain we can get our comps into positive territory."

Since Rent-A-Center operates a rent-to-own model, it keeps an especially close watch on customer delinquencies. "On the collections front, those results have been consistent," Fadel said. "In fact, our fourth-quarter delinquency numbers trended slightly better than last year, and for the year, our customer skip-and-stolen percentage was 2.4%. Prior years ran between 2.3% and 2.5%, so it's right in line with where it's been trending."