RCII - Rent-A-Center slides 11% after guidance disappoints; new corporate name on tap

Rent-A-Center ( NASDAQ: RCII ) spun lower in early trading on Thursday after setting guidance below expectations alongside the Q4 earnings report .

For Q4, the retailer reported consolidated revenues decreased 15.4% year-over-year to $990M, primarily due to lower rental revenues in both the Acima and Rent-A-Center Business segments from lower lease portfolio values compared to a year ago. Comparable sales fell 8.1% during the quarter to miss the consensus mark of -6.0%.

Adjusted EBITDA decreased 15.2% year-over-year to $110.1M, primarily due to lower revenues and higher loss rates for the Rent-A-Center Business segment. The adjustd EBITDA margin rate was unchanged from a year ago.

"While the external environment remains challenging and uncertain, we believe the Company is in better standing today to address the growing demand for flexible consumer financial solutions," noted CEO Mitch Fadel.

Looking ahead, the company is organizing itself under a new enterprise brand and changing its corporate name to Upbound Group Inc., which will trade under the ticker UPBD starting on February 27. Guidance was set at 2023 revenue of $3.8B to $4.0B vs. $4.0B consensus and EPS of $2.50 to $3.00 vs. $3.17 consensus.

Shares of Rent-A-Center ( RCII ) were down 11.48% premarket to $24.62 to cut into what has been a strong 2023 rally.

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