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January 28, 2014
11:42 EDTRCII, CONN, AANRent-A-Center plunges after 'most challenging December in years' dings profit
Rent-to-own operator Rent-A-Center (RCII) is one of today's losers after the company's fourth quarter results and fiscal 2014 profit guidance fell significantly below expectations. WHAT'S NEW: Last night, Rent-A-Center reported fourth quarter earnings per share of 25c and revenue of $769.6M, compared to analysts' consensus estimates of 75c and $787.95M, respectively. Same-store sales declined 1.1% for the company in the quarter. The company forecast FY14 EPS of $2.30-$2.50, compared to consensus of $3.20, and revenue growth of 4.5%-7.5%. The company expects same-store sales to be up 3%-5.5% this fiscal year. The company said the large profit miss was mainly attributable to a reduction in gross profit in the Core U.S. segment and an overall increase in operating expenses. “We continue to face meaningful headwinds in our domestic U.S. rent-to-own business, including a customer under severe economic pressure and an intensified promotional environment. These conditions significantly impacted our Core U.S. segment customer agreement growth in December, which was the most challenging in years," said Rent-A-Center CEO Mark Speese. ANALYST REACTION: In a note to investors this morning, research firm Canaccord Genuity maintained a Hold rating on the shares with a $31 price target. The firm said they would remain on the sidelines as the company's core rent-to-own business was struggling and there was no clear catalyst in place to revive it. Canaccord added that the company's 2014 guidance suggests its collections costs are "sky-rocketing." PRICE ACTION: In late morning trading, Rent-A-Center shares tumbled over 19% to $25.12 on nearly seven times its average daily trading volume. Earlier in the session, the stock hit a fresh 52-week low of $24.75. Over the past twelve months, the stock has lost approximately 28%. OTHERS TO WATCH: Rent-A-Center's competitors include Aaron's (AAN) and CONN's (CONN). Shares of Aaron's were up 1% in morning trading, while CONN's slipped 0.5%.
News For RCII;AAN;CONN From The Last 14 Days
Check below for free stories on RCII;AAN;CONN the last two weeks.
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April 17, 2014
10:14 EDTAANVintage withdraws $30.50 buyout offer to Aaron's, will mount proxy contest
Vintage Capital Management, the second largest shareholder of Aaron's, announced that it has delivered a letter to the independent directors of Aaron's, in which VCM withdrew its previously-announced offer to acquire Aaron's for $30.50 per share in cash in light of the company's recent acquisition of Progressive Finance and continued poor performance. The letter also confirmed that VCM will proceed with a proxy contest at this year's annual meeting and asked Aaron's to allow shareholders to choose the candidates of their choice at the annual meeting.
10:13 EDTAANVintage Capital withdraws $30.50 per share cash offer to acquire Aaron's
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April 15, 2014
12:18 EDTRCII, CONN, AANAaron's slides after cutting Q1 guidance, rejecting Vintage bid
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12:04 EDTAANAaron's sees FY15 cash EPS $2.55-$2.80 following Progressive acquisition
Aaron's sees FY15 revenue for Aaron's + Progressive of $3.25B-$3.35B. Guidance may not compare to consensus of $1.97 for EPS and $2.36B for revenue in FY15.
12:02 EDTAANAaron's sees FY14 cash EPS $2.05-$2.20 following Progressive acquisition
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09:16 EDTAANOn The Fly: Pre-market Movers
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09:00 EDTAANAaron's falls 4.8%
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07:17 EDTAANAaron's to host conference call
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07:08 EDTAANAaron's calls Vintage Capital's offer 'inadequate'
In an open letter to shareholders, Aaron's said that "During the Board's process we received a proposal from Vintage Capital Management to acquire all of the outstanding shares of Aaron's for $30.50 per share. Following the review of the proposal by the Transaction Committee of the Board, as well as our financial and legal advisors, our Board has unanimously rejected Vintage's offer as inadequate, illusory and not in the best interests of Aaron's shareholders." The company also announced a strategic plan focused on its core business, and specifically will: "Renew our focus on same store revenue growth for our core portfolio, through improved execution, optimization of merchandising and pricing and an enhanced go-to-market strategy; Refine and grow our online platform; Drive cost efficiency to recapture margin, including through SG&A cost savings and rationalizing underperforming stores; Moderate new company-operated store growth to 2-3% per year; and Strengthen and grow the franchise store base. Additionally, we will target an overall debt-to-capitalization ratio of 20%, and use excess cash to continue to return capital to our shareholders... Overall, we will continue to support franchisees opening locations at a rate of approximately 3-4% per year as they continue to grow and build the Aaron's brand." The company also announced that CFO Gil Danielson has stepped down from the Board, effective immediately; he will continue to serve as CFO.
07:08 EDTAANAaron's acquires Progressive Finance Holdings for $700M
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07:05 EDTAANAaron's says effect of winter weather to negatively impact Q1 EPS by 5c-6c
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07:04 EDTAANAaron's cuts Q1 EPS view to 51c-54c from 57c-62c, consensus 59c
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07:03 EDTAANAaron's cuts Q1 EPS, revenue guidance

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