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Rent-A-Center Profit Plunges

PLANO, TX-The rent-to-own operator sees its earnings and revenues decrease, but execs are happy with the results.

By Jennifer D. Duell | Updated on February 08, 2006

PLANO, TX-Rent-A-Center Inc.’s fourth-quarter profit fell 25%, but represented an improvement over previous quarters to receive praise from analysts. Earnings were $35.1 million, or 50 cents per share, compared with $46.9 million, or 61 cents per share, a year ago. The results beat analyst expectations of 44 cents a share. “I am pleased with our current results and our current direction,” said chairman and CEO Mark Speese during the chain’s earnings conference call. The loss can be attributed to a 0.2% decline in same-store sales and a decrease in revenue from the closing and merger of stores as part of a consolidation plan. Revenue was $583.2 million for the quarter, down from $585.3 million for the same period last year.During the fourth quarter, Rent-A-Center opened 28 new rent-to-own store locations, acquired five stores, consolidated 18 stores into existing locations, sold 37 stores and closed five stores. The chain currently operates 2,360 stores across the nation.For first-quarter 2006, the chain is forecasting net earnings per share of between 48 cents and 52 cents, including stock option expenses. It affirmed its full-year forecast of between $2 and $2.10 per share, including expenses. The chain plans to add 60 to 80 new stores in 2006, representing a 5% increase in the store base, Speese added.

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