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Rent-A-Center's Q4 Lackluster

PLANO, TX-Comp-store sales for rent-to-own chain declined 3.7% in Q4 2004.

By Dees Stribling | Updated on February 08, 2005

PLANO, TX-The rent-to-own giant Rent-A-Center has reported higher revenues in the fourth quarter of 2004—$585.3 million, representing a 4.8% increase from $558.7 million in Q4 2003—but the chain’s comp-store sales decreased 3.7% compared with the same quarter last year. Earnings and comp-store sales for the whole of calendar 2004 mirrored that pattern, with revenues increasing 3.8% compared with 2003, while comp store sales fell 3.6%.

“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.”

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