Revenue Performance - Consolidated revenues increased by approximately $177.3 million for the six months ended June 30, 2024, compared to the same period in 2023[132]. - Total revenues increased by $97.3 million, or 9.9%, to $1,076.5 million for the three months ended June 30, 2024, compared to the same period in 2023[140]. - Total revenue increased by $177.3 million, or 8.9%, to $2,172.5 million for the six months ended June 30, 2024, compared to $1,995.2 million for the same period in 2023[151]. - Acima segment revenues increased by approximately $165.9 million, attributed to a rise in rentals and fees revenues of $126.7 million and merchandise sales of $39.2 million[133]. - Revenues in the Rent-A-Center segment increased by approximately $9.5 million for the six months ended June 30, 2024, driven by a 1.6% increase in same store sales[134]. - Mexico segment revenues increased by 15.5% for the six months ended June 30, 2024, contributing to a gross profit increase of 16.9%, or $4.3 million[135]. - Revenues for the Mexico segment increased by 13.1% to $20,868,000 for the three months ended June 30, 2024, and by 15.5% to $41,435,000 for the six months ended June 30, 2024, compared to the same periods in 2023[169]. Profitability Metrics - Gross profit rose by approximately $48.5 million during the first half of 2024, primarily driven by the Acima segment's performance[132]. - Gross profit increased by $25.8 million, or 5.1%, to $532.0 million for the three months ended June 30, 2024, with a gross profit margin of 49.4%[144]. - Gross profit increased by $48.5 million, or 4.8%, to $1,061.0 million, with gross profit as a percentage of total revenue decreasing to 48.8% from 50.7%[154]. - Operating profit increased by approximately $93.5 million, mainly due to a decrease in other gains and charges of $103.7 million[132]. - Operating profit increased by $93.5 million to $142.4 million, representing 6.6% of total revenue, up from 2.5% in the prior year[159]. - Operating profit decreased by $3.3 million, or 4.0%, to $80.7 million for the three months ended June 30, 2024, with an operating profit margin of 7.5%[149]. - Operating profit for the Mexico segment increased by 20.1% to $1,559,000 for the three months ended June 30, 2024, and by 42.0% to $3,255,000 for the six months ended June 30, 2024, compared to the same periods in 2023[171]. Expenses and Costs - Non-labor operating expenses increased by $39.9 million, general and administrative expenses rose by $12.2 million, and operating labor costs increased by $5.9 million[132]. - Cost of rentals and fees rose by $76.9 million, or 13.1%, to $665.7 million, with the cost as a percentage of rentals and fees revenue increasing to 37.9% from 36.5%[152]. - Non-labor operating expenses increased by $39.9 million, or 10.6%, to $417.7 million, with expenses as a percentage of total revenue rising to 19.7% from 19.5%[156]. - General and administrative expenses rose by $12.2 million, or 12.6%, to $108.7 million, with expenses as a percentage of total revenue increasing to 5.0% from 4.8%[157]. - Operating labor increased by $4.3 million, or 2.8%, to $156.2 million for the three months ended June 30, 2024, representing 14.9% of total revenue[145]. Cash Flow and Indebtedness - Cash flow from operations was $60.5 million for the six months ended June 30, 2024, with cash and cash equivalents of $82.5 million[136]. - The company held outstanding indebtedness of $1.3 billion as of June 30, 2024[136]. - Operating cash flow generated was $60.5 million for the six months ended June 30, 2024, a decrease of $81.5 million from $142.0 million for the same period in 2023[176]. - Cash used in investing activities increased to $26.1 million for the six months ended June 30, 2024, compared to $21.4 million for the same period in 2023[177]. - The company ended the second quarter of 2024 with $82.5 million in cash and cash equivalents and outstanding indebtedness of $1.3 billion[175]. - As of July 25, 2024, the company had outstanding borrowings of $806.7 million under the Term Loan Facility and available commitments of $410.6 million under the ABL Credit Facility[187]. Market and Operational Insights - The company plans to enhance its competitive position by expanding direct-to-consumer channels and leveraging data analytics capabilities[122]. - E-commerce revenues represented approximately 26% of total lease-to-own revenues for the six months ended June 30, 2024[124]. - Revenue mix is moderately seasonal, with the first quarter generally providing higher merchandise sales due to federal income tax refunds[193]. - The company is exposed to market risk from foreign exchange rate fluctuations of the Mexican peso to the U.S. dollar[198]. Shareholder Returns - A quarterly cash dividend of $0.37 per share was approved for the third quarter of 2024, reflecting the company's commitment to returning value to shareholders[117]. Segment Performance - Franchising segment revenues decreased by $3.7 million for the six months ended June 30, 2024, primarily due to a decrease in merchandise sales[136]. - Franchising segment revenues decreased by 7.3% to $27,945,000 for the three months ended June 30, 2024, and by 6.2% to $56,246,000 for the six months ended June 30, 2024, compared to the same periods in 2023[172]. - Merchandise losses in Acima locations due to LCOs were approximately 9.6% for the six months ended June 30, 2024, compared to 8.9% for the same period in 2023[163]. - Operating profit margin for Rent-A-Center decreased to 14.8% for the six months ended June 30, 2024, down from 15.5% in the prior year, primarily due to technology investments and elevated insurance costs[168].
RENT-A-CENTER(RCII) - 2024 Q2 - Quarterly Report