Rent-A-Center Inc. shares dropped in the extended session Wednesday after the consumer appliance rental company said fourth-quarter results were hurt by supply-chain problems, inflation, and a pullback in government relief, trends it expects to last into 2022.
Rent-A-Center
RCII,
shares plummeted more than 30% after hours, following a 7.8% fall in the regular session to finish at $34.76, their lowest close since Dec. 15. 2020.
The company reported fourth-quarter net income of $9.8 million, or 15 cents a share, compared with $56.3 million, or $1 a share, in the year-ago period. Adjusted earnings, which exclude stock-based compensation expenses and other items, were $1.08 a share, compared with $1.03 a share in the year-ago period.
Revenue rose to $1.17 billion to $716.5 million in the year-ago quarter.
Analysts surveyed by FactSet had forecast $1.61 a share on revenue of $1.2 billion.
“In the fourth quarter, the combined effect of significantly reduced government pandemic relief, decades-high rates of inflation, and supply-chain disruptions impacted our target customers’ ability to access and afford durable goods, which negatively impacted our results,” said Mitch Fadel, Rent-A-Center chief executive, in a statement.
“We anticipate these external headwinds will continue for the foreseeable future, resulting in year-over-year declines in revenue and earnings for 2022, on a pro forma basis, while free cash flow should increase for the year,” Fadel said.
Rent-A-Center forecast earnings of 65 cents to 80 cents a share on revenue of $1.13 billion to $1.16 billion for the first quarter, and $4.50 to $5 a share on revenue of $4.45 billion to $4.6 billion for the year.
Analysts had estimated $1.53 a share on revenue of $1.25 billion for the first quarter, and $7.04 a share on revenue of $5.27 billion for the year.
This post was originally published on Market Watch
