), the largest rent-to-own operator in the U.S, leverages an
extensive network of stores to penetrate into its target markets,
which facilitates the company to generate healthy sales and gain an
advantage over its competitors.
Following its rationale, Rent-A-Center, which competes with
) and Advance America, recently announced the opening of its new
store in East Harlem, New York.
The company, through its latest stores will offer luxury
furnishings, electrical devices, electronics and computers to the
residents of this region. With the inclusion of this new store,
Rent-A-Center now operates through 176 locations in New York.
The residents of the region will now have an additional option
of purchasing goods with flexible payment options, giving them the
freedom to pay weekly, biweekly or monthly. Moreover, the company
offers a lifetime recall service, which facilitates its customers
to re-rent the same or a comparable item and receive payments.
Apart from store expansion, the company is also taking prudent
steps to optimize rental merchandise levels in accordance with
sales trends. Rent-A-Center implemented a centralized inventory
management system, including automated merchandise replenishment.
Moreover, a new centralized purchasing system allows better
management of rental merchandise.
Going forward, the company remains optimistic about its future
growth as it opens stores in international markets and accelerating
the rollout of RAC Acceptance kiosks. Management maintained its
fiscal 2012 earnings projection of $3.00 to $3.20 per share.
Moreover, the company reiterated its revenue growth forecast of
7% to 10% for the year, attributable to a low single-digit jump in
the Core U.S. and more than $300 million contribution from the RAC
Acceptance business. Management expects comparable-store sales
between 2.5% and 4.5%.
Currently, we have a long-term 'Outperform' recommendation on
the stock. Moreover, the company has a Zacks #2 Rank, which
translates into a short-term 'Buy' rating.
(AAN): ETF Research Reports
RENT-A-CENTER (RCII): Free Stock Analysis
To read this article on Zacks.com click here.