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Rent-A-Center posts a weak Q4


Rent-A-Center's Acceptance Now program has been a big hit with consumers, but the kiosks weren't enough to lift the company in the fourth quarter.

The company reported a 28% increase in same store sales at the Acceptance Now kiosks, which allow customers to pick out items from certain retailers partnering with RAC. Rent-A-Center will buy the item and lease it to the customer with no credit check needed.

But same store sales at traditional Rent-A-Center locations declined .6%. Earnings per share, exclusive of special items, fell to $1.95 for the quarter, compared to $2.33 for full year 2013. The dip was attributed to investment in new company initiatives, high skipped payment and stolen merchandise losses and costs to launch Rent-A-Center's Acceptance Now kiosks.

"Our EPS did not meet our expectations because our margins were not as strong as projected and skip/stolen losses were too high," CEO Robert D. Davis said. "As a result, our resolve is strengthened in the pursuit of that balance and the urgency remains high in delivering on the initiatives and results that we have promised. To that end, our focus is on improving operational execution by implementing a new labor model for our core U.S. stores, developing a new supply chain and implementing a customer-focused value-based pricing strategy."

The company saw its total revenue increase 4% to $797 million for the quarter, riding on a 4.7% increase in same-store sales. Rent-A-Center also ended the year with $46.1 million in cash and cash equivalents.
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