Rent-A-Center To Strengthen U.S. Core Business; Establishes 2018 & 2019 Targets

(RTTNews) - Rent-A-Center, Inc. (RCII) announced a new strategic plan designed to restore growth, improve profitability and maximize value for all stockholders. The company said the initiatives are focused on strengthening the Core U.S. business; optimizing and growing the AcceptanceNOW business; and leveraging technology investments to expand distribution channels and integrate retail and online offerings.

For U.S. Core, the company is reestablishing the 2x2 matrix cost-based approach as its foundational pricing strategy, and implementing shorter terms and alternative term strategies with the objective of increasing ownership from approximately 25% to 40%. The company is also improving early payout options that promote ownership, with the expectation that return on investment will increase from approximately 2.7x to 3.0x. Rent-A-Center anticipates that these initiatives will result in an estimated run-rate EBITDA improvement of approximately $65 million by 2018-2019.

As a result of the new plan, in 2018, Rent-A-Center expects to achieve: revenue growth of low-single digits, EBITDA margin of 7.5% - 8.5%, and EPS of $1.20 - $1.40. In 2019, the company targets: revenue Growth of mid-single digits; EBITDA margin of 9.5% - 10.5%, and EPS of $2.00 - $2.25.