Acquisition and Expansion - The company completed the acquisition of Brigit on January 31, 2025, enhancing its financial health technology offerings [139]. - The company aims to grow penetration with current Acima third-party retailers and expand direct-to-consumer channels [151]. - The company is evaluating the effects of the One Big Beautiful Bill Act, signed into law on July 4, 2025, on its financial statements [143]. - Cash used in investing activities rose to $304.9 million for the six months ended June 30, 2025, primarily due to the acquisition of Brigit for $275.9 million [202]. Revenue and Profitability - Consolidated revenues increased by approximately $161.4 million, or 7.4%, to $2.33 billion for the six months ended June 30, 2025, compared to $2.17 billion for the same period in 2024 [158]. - The Acima segment revenues rose by approximately $142.1 million, driven by higher rentals and fees revenues and merchandise sales, resulting in an operating profit increase of approximately $33.8 million [159]. - Rent-A-Center segment revenues decreased by approximately $60.8 million, or 3.0%, due to declines in same store sales, leading to an operating profit decrease of approximately $20.3 million [160]. - The Brigit segment generated revenues of $83.8 million and an operating profit of $19.3 million since its acquisition [161]. - Total revenues for the three months ended June 30, 2025, increased by $81.0 million, or 7.5%, to $1.16 billion, primarily due to the Acima and Brigit segments [165]. - Gross profit for the three months ended June 30, 2025, increased by $39.8 million, or 7.5%, to $571.8 million, with a gross profit margin of 49.4% [169]. - Total revenue increased by $161.4 million, or 7.4%, to $2,333.9 million for the six months ended June 30, 2025, compared to $2,172.5 million for the same period in 2024 [177]. - Operating profit decreased by $29.1 million, or 20.4%, to $113.3 million for the six months ended June 30, 2025, with an operating profit margin of 4.9% compared to 6.6% for the same period in 2024 [185]. Cost and Expenses - Operating labor expenses decreased by $7.1 million, or 4.5%, to $149.1 million, representing 12.9% of total revenue for the three months ended June 30, 2025 [170]. - General and administrative expenses increased by $9.8 million, or 18.2%, to $63.4 million, accounting for 5.5% of total revenue for the three months ended June 30, 2025 [172]. - Cost of rentals and fees increased by $44.9 million, or 6.7%, to $710.6 million for the six months ended June 30, 2025, with costs as a percentage of revenue rising to 39.4% from 37.9% [178]. - General and administrative expenses increased by $18.5 million, or 17.0%, to $127.2 million for the six months ended June 30, 2025, representing 5.4% of total revenue [183]. Cash Flow and Financial Position - Cash flow from operations was $145.6 million for the six months ended June 30, 2025, with cash and cash equivalents of $106.8 million and outstanding indebtedness of $1.6 billion [163]. - The company ended the second quarter of 2025 with $106.8 million in cash and cash equivalents and outstanding indebtedness of $1.6 billion [200]. - Operating cash flow increased by $85.1 million to $145.6 million for the six months ended June 30, 2025, compared to $60.5 million in 2024 [201]. Market and Economic Conditions - Macroeconomic conditions have significantly impacted business trends, including changes in consumer payment behaviors and rising product costs [145]. - The company is exposed to foreign exchange rate fluctuations between the Mexican peso and the U.S. dollar, affecting the financial position of its stores in Mexico [225]. - Revenue is moderately seasonal, with the first quarter generally providing higher sales due to federal income tax refunds [220]. Debt and Financing - The company entered into a seven-year $875 million senior secured term loan facility, with the option to add up to $500 million in incremental term loans, subject to certain financial ratios [212]. - As of July 24, 2025, the company had outstanding borrowings of $798.0 million under the Term Loan Facility and available commitments of $159.5 million under the ABL Credit Facility [214]. - The company issued $450 million in senior unsecured notes due February 15, 2029, bearing interest at 6.375% [215]. Tax and Legal Matters - Income tax expense decreased by $5.1 million, or 41.0%, to $7.4 million for the three months ended June 30, 2025, primarily due to lower earnings before income taxes [175]. - The company recorded $0.4 million in uncertain tax positions as of June 30, 2025, representing potential future cash liabilities [219]. - Other gains and charges increased by $57.1 million to $108.8 million for the six months ended June 30, 2025, driven by legal matters and the Brigit acquisition [184].
RENT-A-CENTER(RCII) - 2025 Q2 - Quarterly Report