Acquisition and Strategic Initiatives - The company completed the acquisition of Brigit on January 31, 2025, enhancing its financial health technology offerings [139]. - The company is committed to executing strategic initiatives that enhance financial mobility for underserved consumers through potential mergers and acquisitions [142]. - The company spent $274.9 million on the acquisition of Brigit and ended the quarter with $107.3 million in cash and cash equivalents, alongside outstanding indebtedness of $1.5 billion [188]. Financial Performance - Total revenues increased by $80.4 million, or 7.3%, to $1,176.4 million for the three months ended March 31, 2025, compared to $1,096.0 million for the same period in 2024 [164]. - The Acima segment revenues increased approximately $75.9 million, driven by higher rentals and fees revenues and merchandise sales [158]. - Rent-A-Center segment revenues decreased approximately $25.0 million, with a same-store sales decline of 2.0% [159]. - Gross profit increased by $21.0 million, or 4.0%, to $550.1 million, with a gross profit margin of 46.8% [167]. - Operating profit increased by $0.8 million, or 1.4%, to $62.6 million, representing 5.3% of total revenue [172]. - Acima segment revenues increased by 13.5% to $637.3 million for the three months ended March 31, 2025, compared to $561.3 million in the same period of 2024 [175]. - Gross profit for the Acima segment rose by 10.1% to $186.5 million, with gross profit as a percentage of revenues decreasing to 29.3% from 30.2% year-over-year [176]. - Operating profit for the Acima segment increased by 42.0% to $73.7 million, with operating profit as a percentage of revenues rising to 11.6% from 9.2% year-over-year [177]. - Rent-A-Center segment revenues decreased by 4.9% to $489.0 million, primarily due to a decrease in corporate-owned store count and a 2.0% decline in same store sales [178]. - Gross profit for the Rent-A-Center segment fell by 6.4% to $322.8 million, with gross profit as a percentage of revenues at 66.0%, down from 67.1% year-over-year [179]. - Operating profit for the Rent-A-Center segment decreased by 15.0% to $66.4 million, with operating profit as a percentage of revenues declining to 13.6% from 15.2% year-over-year [180]. - The Brigit segment generated revenues of $31.9 million and operating profit of $8.8 million since its acquisition [160]. Cash Flow and Financial Position - Cash flow from operations was $137.7 million, with cash and cash equivalents of $107.3 million and outstanding indebtedness of $1.5 billion [162]. - Operating cash flow for the three months ended March 31, 2025, was $137.7 million, an increase of $92.3 million from $45.4 million in the same period of 2024 [189]. - The company has a five-year asset-based revolving credit facility with commitments of $550 million and a letter of credit sublimit of $150 million, which can be increased by up to an additional $125 million [197]. - As of April 24, 2025, the company had outstanding borrowings of $800.1 million under the Term Loan Facility and available commitments of $134.5 million under the ABL Credit Facility [201]. - The company issued $450 million in senior unsecured notes due February 15, 2029, bearing interest at 6.375% [202]. - The total remaining obligation for existing store lease contracts was approximately $329.4 million as of March 31, 2025 [203]. - The company recorded $0.4 million in uncertain tax positions as of March 31, 2025, representing potential future cash liability [207]. Market and Economic Conditions - Macroeconomic conditions have significantly impacted business trends, including changes in consumer payment behaviors and rising product costs [144]. - Revenue is moderately seasonal, with the first quarter generally providing higher sales due to federal income tax refunds [208]. - A hypothetical 1.0% increase or decrease in market interest rates would result in an additional $11.0 million annualized pre-tax charge or credit to the company's financial statements [212]. - The company is exposed to foreign exchange rate fluctuations of the Mexican peso to the U.S. dollar, affecting the financial position and operating results of its stores in Mexico [213]. Operational Insights - The lease portfolio value reflects the expected monthly rental income from active lease agreements, indicating the company's ongoing revenue potential [150]. - The same store lease portfolio value is calculated from stores operated for 13 months or more, providing insights into the stability of revenue streams [151]. - The company aims to grow penetration with current Acima third-party retailers and expand direct-to-consumer channels, enhancing market reach [151]. - The company is focused on leveraging data analytics to attract new customers and mitigate risks across business segments [141]. - The company emphasizes the importance of integrating technology platforms to improve consumer experience and operational efficiency [141]. Dividends - The company announced a quarterly cash dividend of $0.39 per share for Q1 2025, paid on April 22, 2025 [143].
RENT-A-CENTER(RCII) - 2025 Q1 - Quarterly Report