As it reported fourth-quarter and full-year financial results, which beat a Wall Street earnings estimate despite being down year over year, Rent-A-Center announced it was changing its corporate name to Upbound Group, with its banners retaining their identities.
Upbound topped a MarketBeat-published analyst consensus estimate for earnings of 75 cents per adjusted diluted share and came in basically flat to a consolidated revenue estimate.
Total store revenues were $960.9 million versus $1.13 billion in the year-before quarter while total consolidated revenue was $990.5 million versus $1.17 billion. Operating profit was $42.3 million compared to $36.8 million in the year-previous period, while adjusted operating profit was $92.2 million versus $110.4 million.
Net earnings for the full year were $12.4 million, or 21 cents per diluted share, versus $134.9 million, or $2.02 per diluted share, in the year earlier. Adjusted net earnings were $218.2 million, or $3.70 per diluted share, versus $372.3 million, or $5.57 per diluted share, in the year prior.
Total store revenues were $4.13 billion versus $4.43 billion in the year before while total consolidated revenue was $4.25 billion versus $4.58 billion. Operating profit was $148.5 million compared to $280.5 million in the year previous while adjusted operating profit was $381 million versus $556.2 million.
In announcing the financial results, Mitch Fadel, Upbound CEO, said, “We are encouraged by the company’s fourth-quarter performance as we executed well on our top line, risk management, and efficiency initiatives to mitigate the effects of macro-economic headwinds, and delivered financial results that exceeded our revised outlook. Reflecting on full-year results, 2022 was a challenging operating environment with many households adjusting their financial priorities following the unsustainable levels of stimulus-driven income and consumption that occurred in 2020 and 2021 while experiencing the highest inflation in decades. This drove significant headwinds in our business throughout the year, to which we responded with several initiatives that we believe position the company well going forward. Examples of recent initiatives include improved automation, new investments to better utilize data analytics in our underwriting processes and several new executive hires.”
The marketplace remains an uncertain place today, Fadel said, but added, ”We believe the company is in better standing today to address the growing demand for flexible consumer financial solutions. To effectively align our vision, values and strategies, the company is organizing itself under a new enterprise brand and changing its corporate name to Upbound Group, which will trade under the ticker UPBD starting on February 27. As we start this next stage of the company’s evolution, I am very optimistic about our ability to deliver significant value for our customers, merchant partners, employees and shareholders.”
The renaming draws attention to the company’s evolution into an omnichannel platform operator that gives consumers access to flexible financial solutions, the company noted. Upbound will provide strategic planning and shared services across the organization to support and lead the development of innovative, inclusive, and technology-driven solutions that address consumer needs and aspirations, the company stated. It will continue going to market under its established operating brands including Rent-A-Center and Acima, a leader in the third-party, virtual lease-to-own industry.
“Two years ago, Rent-A-Center, Inc. closed on its acquisition of Acima Holdings, almost doubling the size of the company and dramatically changing both organizations,” Fadel said. “We are now a unified, multi-brand platform company that includes more than just the Rent-A-Center business. We are thrilled to launch Upbound, a new enterprise brand and operating structure that will better serve our business and mission. This announcement is a significant milestone in our evolution and strategic plan, as we strive to offer more inclusive financial solutions that address the changing and growing needs of consumers.”
