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Rent a Center Inc De (RCII)

Participants
Brendan Metrano Vice President-Investor Relations
Mitch Fadel Chief Executive Officer
Jason Hogg Executive Vice President-Acima
Maureen Short Chief Financial Officer
Anthony Blasquez Executive Vice President-Rent-A-Center Business
Kyle Joseph Jefferies
Vincent Caintic Stephens
Brad Thomas KeyBanc Capital Markets
Anthony Chukumba Loop Capital Markets
John Rowan Janney
Bobby Griffin Raymond James
Call transcript
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Operator

Good morning, and thank you for holding. Welcome to Rent-A-Center’s Second Quarter Earnings Conference Call.

As a reminder, this conference is being recorded, Thursday, August 5, 2021.

Your speakers for today are Mr. Mitch Fadel, Chief Executive Officer of Rent-A-Center; Maureen Short, Chief Financial Officer; Jason Hogg, Executive Vice President of Acima; Anthony Blasquez, Executive Vice President, Rent-A-Center Business; and Brendan Metrano, Vice President of Investor Relations. to conference like to now would turn over the Mr. I Metrano. ahead, sir. go Please

Brendan Metrano

on Thank webcasts you after related the link and the morning, release, and an you, Good Demaria. all our review thank are closed XXXX. you’ve investor.rentacenter.com. to the our earnings to yesterday. our opportunity release to of was website Rent-A-Center discuss a all market results at materials, quarter for distributed available including second which Hopefully live had the team joining for The

a some the release call expectations. our could materially are yesterday issued SEC many As reminder, provided differ company’s of required on revise include as Rent-A-Center our undertakes financial earnings filings. This our financial from statements, that law. call are measures subject to These as the well this no factors factors cause statements to adversely obligation which actual are results over forward-looking GAAP description described publicly or forward-looking in by statements, and website, our quarter for earnings also to that, to second With Please turn call update except measures. I’ll be release, reconciliations non-GAAP most which the a will found any and financial the can measures. comparable Mitch. non-GAAP on as refer to to of the references the to in

Mitch Fadel

Brendan. you, Thank

the Head, analyst relations. decade. he he Brendan that, I’d introduce where over And sell recently Relations. For us Brendan Investor to a side to like as to who was prior starters, investor Western a us Metrano, comes headed also Union for from joined

in community, and equity So markets he of fintech. strong brings and payments the investment a especially understanding

results. everyone. you you us And and for quarter to discuss good thank joining Brendan. our welcome, And second thank morning, this morning again So

forma We of our over with line outstanding basis the strong release secular points forma hopefully momentum yesterday the into the to XX% positions the you’ve heading is in expansion seen over of XXX market. top in changes on growth of margin business our results second and from pro continues path If transformation afternoon, significantly that pro the had press deliver organic in with half and benefit to acquisition quarter. major us the year Acima

time So customers, investors. exciting for our very partners and our retail team,

Before take jumping our quarter, a behavior, into it this need have boils for including our more let’s to trends and Essentially seem to favourable minute runway, disruption. a backdrop prevailing inclusivity the business explore to positioned consumer to being story. a technological fundamental well long from demographic in some down that shifts benefit behind

not plans. As It’s I enabled think to is small COVID-XX pandemic. rather goods we’re by it of payment with quite up all today pay much One of savings. adoption increasingly depleting rapidly, pertains consumer than acceptable, many all are evolving stream to the of services and recently for accelerated types credit preferable payments, of by and if balances of that becoming familiar or card with running technology us the a change aspects behavior

and flexible long-term the or convenient Rent-A-Center’s choice, their of for, allows and other channel to to shop We’re consumers experiences. physical conveniently access consumer hassle-free seamless, through for commitments. obligations goods from omni-channel benefiting get for hybrid durable digital, differentiated long-term without or also preferences model pay debt

citizens. rather are are under-banked lower inclusivity second feel those and for off available growing are effectively payment Many us like services benefits is retailers that demand make cash solutions constraint traditional than groups. lockout trend experiences services that often can underprivileged quality that for consumers people Another that promote or class and closed

When Acima LeasePay to quality industry underserved every its recent financially respect given is and a data experiences. a aspect of especially are revolutionizes LTO us strives transforming with in opportunity areas. think that e-commerce an when to of of this and and is still minutes. shopping those strong in platform is capabilities that’s will Moreover, products expands launch two the years. access first-class virtual, half proprietary roughly market top We digital, business, consumers fintech our in business we by just over our for our almost technology leasing half with for on think other the business Acima, about for about that and industry-leading form experience underserved the leading infancy us retailers. last omni-channel durable breaking has payment to Card ground business Jason of whether product transformation developments consumer our and with an a the in And which our dramatically financially acquisition foundation with technology expand industry and Our growth. or model, with you incredible of the as today powered payments the business you the think for that few analytics new is provide finally, Mastercard, goods provide new digital,

this increasingly volume like transformation merchandise to as of business, Given you’ll us gross the context, did and we payments hear pivoting concepts fintechs our quarter. discussing this

driven GMV organic let’s Acima company lease-to-own or as revenue we second made Acima during basis, by progress organic highlights review quarter. revenue the the a the the revenue by well increased billion significant merchandise XX% which acquisition. as resulting in grew incremental $X.X Total year-over-year, that growth Rent-A-Center of led our and now from volume So forma was business the XX% course, growth for organic approximately and for gross was XX% and XX.X% total GMV Business. being And on virtual largely pro

and We of environment, from year. uncommon procurement especially transactions the initiatives certainly tighter and growth we is our past performance, factors portfolio under strategies that and we strong as conditions, effects anti-cyclical past, behind stimulus a of marketing top And continue underlying our of some has fundamentals, on durable range have new adding challenging this, technological of But actually and of advancements as questions, job said includes implementing e-commerce we and primary the driving The a over from the of product payments. it benefited in including credit benefits macro recent a team just fantastic to merchants. lease-to-own environment. stimulus believe On payments execution. offerings aspects done with and lot get macro a business like

You the to know, when credit economy customers more. tend and lease is our loose, core booming is

all. believe to During pandemic more gain it do we’ve result is didn’t tightens, good need performance periods, and credit as story a previously our at that We or of we that as challenging customers as solutions. economic use gets, the when not new our delivered stimulus, who choose not

results Business ahead EBITDA We us. XXX over the XX.X%, remain of expansion profitability second in very Acima. In margins to basis of delivered from solid points of in fact, best benefiting and Rent-A-Center we believe the strong margin our quarter

Adjusted As rates remain with we collections. and in off share improve pro to was lower the earnings paying year. per the a highly to $X.XX efficiency committed investments prior forma company, they’re compared $X.XX in second loss of our share and in relationships, earnings per customer quarter

guidance strong our key we in trends, Given pretty XXXX year-to-date performance metric. favorable across fundamental increased every much underlying our

I’m say the more moreover past the we’ve optimistic a of track repurchase to potential to cash flow has on and the strong value for the the long-term the makes gained specifically about the additional considering value the acquisition significant more position new compelling the strategic With authorized creation us technological company growth our the program. over addition, generation, month is and tremendous Board integration Acima pleased that, to I’ll of of and update insights our million well over us In Jason long-term $XXX prospects financial share turn company. business. about Acima and Acima on even all call

Jason Hogg

Thanks, I been tech the best-in-class. we data been initiatives are Mitch. with of continue LTO leap for engine, full its to talent deeper virtual has on. be our would has the especially side, and capabilities your After reemphasize the working getting and and a with business, To a into on quality, forward we start, decision on quarter technology Acima. were comments impressed complimentary all already analytics Acima

and we we our LTO the very for business. enthusiastic this about expansive the position in So possibilities see industry are virtual

As Mitch up we few quarters can Acima out approaching the make estimated $XXX issued over believe addressable we’ll the launch to the release week the and key billion. a some solutions which we double noted, that market to for will press total next of earlier something Ecosystem, this continue outlining roll Acima

shopping an with is and offer of but creates we how on adhering about for adoption a a about solutions. consumer excited the of inclusive proprietary customers. the rates more innovations the traditional I’d growth take this a back seeing are certainly a its opportunities all but even expand mission to the applications opportunity. I’ll The this mobility of by the primarily barriers big lease in to solutions, benefits picture Acima to or highlights payment We businesses our of of few provide Ecosystem this lack Acima and and achieve like we’re four system, do week’s examples standards use opportunity to exclude create of the practice. release durable for from both debit pending press week would experience and credit the Interestingly, core consumers, because to among for some and meet history. consumers elements success The opportunities financial in in of customers, minutes, large financially Acima durable strong population, principles profiles ecosystem the or first this unlocking cards through this addresses perspective payments that solution credit who with transaction for think the by and for On fintech comprised very reduces citizens. class retailers We’ll retail cash, for cash on patent of ease, shopping cards transaction are top undesirable groups of Acima essentially solution for non-retail highlighted segment level our consumers these system options segment of also the an that challenges a goods can to great to all of income underserved available the have insufficient of that frictions regardless offer some of securing treat as Acima suboptimal our are transparency. so. plus for earlier today, second that and solutions media most underserved most goods This demographics choice, experience this mission customers we financially providers. large is step

Ecosystem, proprietary retail Marqeta fingertips experience enables date LeasePay shopping choice customers of website shopping payment for to their through lease the include a Marketplace, and locations backed to Extension. longer up lease literally and them use merchants e-commerce Acima transaction Acima by multiple accessible by with their Extension of that network access Card marketplace, opens consumers the what both XX,XXX a merchant what from opportunities own locations a customers is piloting destination single marketplace websites retailers marketplace apply The is a stay beyond retail begin on doors. and Acima to key retailers. accept network of Acima experience retailers underserved carry their to journeys in sites promotions be of experience. will a that with customers to on that they $XX need on retailer the acquire integrated Browser the the Browser factor access extend shop, with shopping allows The on amount consumers and is LTO today retail retailers power pre-negotiated mobility as complete to the accounts can TAM. gives Extension the Acima brick in through shopping to for an retail giving Acima an at we estimate in be could point their across XX,XXX is marketplace with financially does select of retailers. complete solution. them Acima. eligible experience driving directly puts e-commerce an market and providing roughly shift the not the Acima, shopping entry Mobile No LTO app mortar individual to LTO retail approved the a to and the Mobile through The It find technology as to only products offers. agreement the This the and consumers untethered where Acima’s Acima a shopping. retailers. The transaction LTO LTO begin durable lets a shopping up website LeasePay an billion customers to Browser to groundbreaking gateway power with providing we Acima, app see, that Mastercard. with You via enjoy is By virtual require year by provided customers physical The Acima with new stores to directly shopping to consumers exclusive on can Acima a the card Ecosystem that choices beyond growing Customers increase the a unlock Acima limited to when manage arrangements. can greater for substantial the opportunities Card paradigm e-commerce innovation and incremental LeasePay consumers transactions executing After the reviewing or end, or millions of to goods that will flexible And Card can plan issued platform, also millions customers LTO

growth a position LeasePay provide Acima Importantly, the opportunities. we favorable should the proprietary with nature Card pursue of competitive these as

estimated the with as remain if going losses retail GMV points hope. We year down the locations was bit as and smoothly quarter all second The as ahead of my skip/stolen via of are merchandise chain XXXX. we Integration prior progress, of store in EBITDA XXX plan. partner results on and churn would a partner location in million the ongoing completed prior versus XX.X% is quarter performance we than onto on conversions. conversion business $XX synergies macro disruptions to progressing our the basis comments the virtual Acima supply X.X% Moving in pro – during second Adjusted XX.X% And the sales expectations track included despite year. on staff strong year-over-year. was somewhat reflected and anticipated came related resulting in operational platform Acima and forma growth, quarter conversions greater realize some margin retail XX% from of

are a operation. from organization and of nimble continue to fast we established We the the of blending more approach see structure optimize the and startup pleased with with a results the

to business We’re framework place roadmap support in as and development getting the product right our well. structural

have communication and execution staff multiunit aligned we our allowing base, leadership with our example, For effectiveness. retailer team more streamlined for

to relationship ongoing and change discussions in further develop, partner expect multiple partners. We and regional retail already retail The this large accounts. with are to strong maximize pipeline continues with our we national

and be In and cost channel lowering addition, per we app evolve alternative exploring attracting that some acquisition. multivariate prove continues could and marketplace browser Marketing from analytics, web through tests, partners meaningful. automation also are our extension more we to are personalization, and to customers

lifetime journey and our inclusive customers. customer management assets, build a videos We demonstrate to number utilization offerings. our developed of are optimizing the of to of of lines tools We lease our value of value

Rent-A-Center the Integrations Finally, I’d over like Acima to thank the effort we entire With team, turn tremendous and for six months. it expectations. to really exceeded I’ll are easy, that, both and think over Anthony. have past legacy never the I

Anthony Blasquez

where portfolio fundamentals similar consecutive to XX.X%, the had business positive growth of first XX Rent-A-Center second revenue on the with of quarter, quarter. of it lease XX.X%, growth. which marks The Jay. sales segment Thanks, strong the our another growth of same-store was end strong quarters with end at quarter of the opposed Underlying same-store at XX% remain

XXXX a pandemic trends pleased portfolio against earlier, performance last drive that as opportunities well with levels. I’m heading we revenues example year, key strong us and to Traffic and that market, during incremental great into with lot expanded position XX% year are such really of remain is increase. see running Tires e-bikes where the quarter a with we’re our strong tires. a with continues half handbags, we’ve the can above even growth platform as our tools, team’s addressable in be Mitch success had this of things back continue disruption. to introducing XX% conversion pre-pandemic maintaining that One categories driver our quarter, to new and As peak the have growth the noted area of E-commerce comping up how growth. year-over-year

omni-channel our engagement. made us interact we That resulting decisions. and deliver retail enhanced Importantly, how e-commerce more leading true and better experience a we outlets, seamless customers. helps combination for make customers dynamic company our we is believe transforming with our and Rent-A-Center. has positioned well in our This to decisioning changed nimble faster are In with a customers

outlets where retail live remains serving our lasting building and to be Our our the element to of advantage. key customers relationships. competitive of committed communities our heritage a continue Rent-A-Center local

just at the a Oklahoma, In year. in we launch store years planned least and a new first opened more in fact, to locations this few we handful

Moving beneficial on strong I’ll and low loss to XX.X% profitability, in compared the year improved with some with activities. the collection to out close adjusted in EBITDA margin prior decisioning, second was on quarter, of our rates execution, comments XX% for stable year. more second strong normal half activity outlook support. of than government this top probably for year economic the of the a factor have half with ongoing tailwinds and been On this first

think factors low the of to over the turn level some the think half With same-store in of EBITDA strong of year. customers, estimated over tailwinds that, of likely margins that into many the have Maureen. to benefited start the we sales double-digit to translate margins Similarly, out normalize I’ll in moderate to it For we our with low-XXs the the the in also moderation range. some begin will our which expect second we will be very the now in still to second year, as second half favorable growth will half slight in sales

Maureen Short

Thanks, Anthony.

the basis, rates forma billion, year-over-year EBITDA $X.X mid-February. Second in quarter more the closed revenues of a to XX%. million XX% adjusted $XXX grew expansion was the $X.XX the acquisition in by prior year $X.XX loss grew cost year segments prior forma our second which margin of to operating gross to a pro Acima, compared million consolidated quarter and in as in items compared cash in Rent-A-Center forma period. due quarter, quarter Acima doubled business, historical After $XXX prior led period, of business cash increase year, the billion. of XX.X% We that and and to was percentage quarter and on generated a with compared a GAAP income EPS the basis was EBITDA we included the net the million performance revenues of were integration. We efficiencies. $X.XX both with Consolidated On in was second underlying line one-time related the versus believe transaction reflect of free XXXX balance quarter in second non-GAAP trends. prior Acima of XX%. the growth, $XXX primarily $X.X pro not margin the do and which revenue adjusting than second solid XX.X% $X.XX for for and the margin period to Adjusted in with in year ended pro the special debt EPS of flow lower the

During the our $XX have fully down quarter, down we and revolving on balance. ABL credit facility million the paid paid outstanding

at ratio a As operational our performance and of QX reduction, continued of our result leverage end we X.X was the had $XXX over of times debt and liquidity. million strong available

quarter, the year-over-year. higher which we share, X% approximately paid cash per During was dividend $X.XX a of

Turning increased fundamental have underlying XXXX to expected guidance XXXX trends, and we better performance ranges. given favorable than our our guidance portfolio and tightened

the levels Our previously increase be margin year. adjusted half portfolio to, of in the back second and key second benefited guidance between continued Anthony the midpoint XXXX, This of $X.XX capabilities XX%. for into in to revenues to the continued first guidance EBITDA $XXX billion historical effects of referred $X.XX balance gradual an half or same the more policy Rent-A-Center versus better back $XX technology of partially Consolidated the investments environment, our our macro million portfolio and $XX in XX.X% guidance responses increase $XXX offset year stimulus towards the in benefits recent year XXXX versus for the and half the midpoint segment quarter rates at that talent performance than profit assumes expected, consolidated the to pandemic. from initiatives. is translating the account We and The drivers the business strong previous half in in but takes the is from year change some revenues additional million May. macroeconomic from in of the of strong to expected million, approximately and expect by expected no reflects and to billion increase now a which our loss to the previous environment payments government may be at new combined have guidance the and than from material adjusted support between level and the EBITDA as of million normalization growth

expect to free third Regarding a in to the expected is an sequential of and margins quarter, midpoint. of typical million the we fourth the notable followed which uptake between generate for $X.XX be seasonality quarter, million to by half flow of is back share $X.XX reflecting non-GAAP now $XXX in decrease modest cadence a the year, over diluted sequential $X.XX, year. at of per $XXX earnings the cash the increase We the expect

the grow year, of Turning some yield profit translates expected as such projections, to of given the and second for segment to we is than EBITDA generate segment EBITDA year increase XX.X%. to realized for million billion $XXX segment adjusted drivers, a reversion which to seasonality. adjusted revenues half levels in to margins expected impact to trends. the at we to our rate Gross which for increase should margins for million, the QX skip/stolen Adjusted be customer towards full payment QX progressively XX.X% Acima EBITDA and $X.XX our Acima key $X.XX margin are higher to $XXX the losses of expect offset and and approximately to historical of synergies, as billion

half back revenues Rent-A-Center low the the to growth $X.XX in of $X.XX achieve We billion same-store business segment billion to year. of double-digit sales with the expect

expected should third quarters, step see range recent expenses be mid-single-digit range. the in the in Third more in and increases with up fourth wage is quarter rates. fourth and high-single-digit growth reflecting loss a skip/stolen the quarter revenue to Operating normalized

the segment, XX.X% Rent-A-Center half XX.X% $XXX year translating of back million the approximately and result will adjusted of $XXX in the trends these full business low-XXs to for of in million year. to expect for to the XXXX the We margins EBITDA

current allocation driving is and for creation shareholders. Our appropriately funding capital remain The on focused our business value in initiatives. long-term value enhancing growth priorities investing top priority

of we After returns. repurchases capital and million dividends needs, M&A free than decisions transactions a and questions. closing, as total that times it’s X% prices. million a stakeholders In $XXX with approximately the share algorithm, today. all our strong company turn target income process fund opportunistically EPS at of authorization time. solid for that our to commitment includes cash your market call our is XXXX noted billion Board projected cash more for expected strong our progress authorization is replaces into to substantial generation, as over we dividend. through repurchases Thank flow leverage. our revenues our by exciting and Accordingly, levels double-digit segment fintech to will margin the compelling investments, highly time to statements share previous top underlying Mitch a line satisfying $XXX make fundamental are share X.X for opportunistically. of your approved cap $XXX company expansion, sound flow posted momentum, Next, earlier, transforming favorable filed a the share look pay Underlying significant repurchase employed will of structure a return has XX-Q that and Directors flow all can of website a you of the with towards represents current and return we dynamic business to in cash $X to now capital believe capital investment more very our later with at financial XXXX, I’ll leverage growth. growth of Detailed shareholders and be targeted generate combination with oriented returns allocation With million our free adequate in of appropriate for of a quarterly shareholders

Operator

Jefferies. [Operator proceed. from Instructions] question will Joseph Your first Please come with Kyle

Kyle Joseph

Rent-A-Center us segments. of and about quarter, all but can we’re Good be through asking a across Acima thinking Thanks of you the really, a XXXX high different a as good of it’s than of think maybe not by normalization less And addressing job some Mitch, and segment, whether think may for and the margins? about or a on do level, the activity as here appreciate business in just it guidance obviously, gave morning. might but commentary of you’re but credit through segment, on normalization out for the impact helpful impacts as we my all – then of losses us demand, and maybe From really walk we taking some offsetting then term kind longer offsetting a if thinking it of questions congratulations look XXXX, about walk you do did specifically, I to you factors, kind the how normalize segments. be and and buyout revenues, the losses strong

Maureen Short

comments. answer if is, target. The as Mitch our guidance longer-term really see that $X XXXX target billion has But our Sure, Kyle, about, we’ve and additional any still can hasn’t is Maureen. I talked then changed. this is

assume XX% of well low comps that will the Some that as to Acima We business. in are to Rent-A-Center growth the three projection revenue over into assumptions single-digit the that go in grow mid years. GMV XX% next as

seeing the are second into for the portfolio of XXXX of half benefits to there the current play that low our if that some still growth carry out XXXX comps. to the forward We could and mid year, continues XXXX. assume projections of portfolio single-digit upside be but And throughout some

agreement. accounts it not include, large or the also MasterCard transaction mentioned and benefits assume million had annualized we’ve incremental accounts, past And with national does we of the Acima that revenue as integration. the million in to any with synergies $XX $XX of rate run the associated We any national

Kyle Joseph

one-off sort segment? payments Did started That’s it. on going Got you very child any obviously, And helpful. impacts of credit last see quick here, tax out then month. either

Mitch Fadel

Really pop No, payments like to so remains like are would payouts still, still on the pretty no things really. but strong, like remains payouts mean, customers this that our the collections hit big off, demand I and strong. Good speak when bigger nothing not customer, good, our portfolio. think stimulus went drop that, Mitch. shape in morning, it’s is Kyle, actually I are anything checks up or good but

Kyle Joseph

the last either on obviously, there’s Maureen Thanks, in roughly EBITDA from between quarter? just quarter-on-quarter Was activity drivers one it we But Jason, can but weeks through it. stable. benefited six losses Acima, there, of from the contribution And and there? from Mitch. like drivers Got the walk and just EBITDA full quarter some or uptick you margin parts have big were me, margin seems less recognizing It moving you of obviously us Acima then that? one first the probably walk Acima, us the expansion buyout really through only of saw good

Maureen Short

Most EBITDA margin. improvement margin gross Kyle. through the of Sure, was in

couple yield. of in so it basis You you the EBITDA is some of improvement lease can see points also higher of to were higher converting it XXX less technology, our XXX or points, margin. a to as sequentially in Acima, There translates most higher which benefits mentioned, increased some and margins results their also a preferred payouts, basis to stores or revenue,

really year. increasing mentioned increase mainly those we year, to the So the throughout taking progressively due expect to last drivers throughout the the quarter, growth do and synergies, main are hold margins as we

Kyle Joseph

answering a Got for it. Very all questions. lot my helpful. Thanks

Maureen Short

Kyle. Thanks,

Operator

Your Caintic come Please from Vincent proceed. next from Stephens. question will

Vincent Caintic

for Thanks question. morning. Good Thanks. taking my

from I margins. if you’re really you guess a existing impressive mixture new second questions seeing from then the impressive you mostly on that’s or in sustainable number, all account think be for if merchants what think up year-over-year. growth a of between that’s was it volume guessing number, first, if with versus organic it’s break organic your XX%, that wins, could GMV be I your going perhaps it but XX% guess to the both, first existing I that Jay, and organic a would so I’m growth

So perhaps That’d two kind if separate be you Thank of could those out. very you. helpful.

Jason Hogg

growth happening. year, grow Yes. to the It’s you good high year with I Good think last GMV morning, hear because the comping at rates XX% we’re is your and trends growth pandemic if look Vincent. else everything expecting from around balance we’re obviously voice. the what and that’s to decelerates of We, for

accounts. be activity to going and that we other One metrics in a is the the traffic a online tailwind things customer to of forecast GMV from the think includes

the with we’re the doing of the as importantly, opening then And e-commerce we’re number the doors. of digital have my XX% mentioned to and going So grow direct some new customer that and is and we’re turns really on will which And week. our bringing assets both leases, new continue we for to ability both channels of number more represents in I more that most this a we technologies currently a online to actually also of the with as job bringing increase announced and to good comments regard like about also mentioned, on that bringing the then I partners there have segment of effect. a

Mitch Fadel

it Yes. add single in was that year the And XX% e-comm that Jay, the I’d low ago. the to that, digits a

Jason Hogg

approach. omni-channel these of in efforts on That’s business continue right. going as we mean, portion it’s volume of I continue a turn to our all the to as grow the to up

Vincent Caintic

Okay, great. this Mitch. think Thank question, a I And is you. second for then

in prepared then labor you doing or competitive landscape, broad at spectrum and it when I’m of lease M&A competitor partnerships look of be seen now by ecosystem fully pay what about the kind not remarks just mentioned sale think the we the guys, focused kind kind M&A might financing being to you. and later another what there? of down or and like you of, of thinking to and you spectrum more be [indiscernible] buy other competitors the the partnerships seems a with on wondering you’ve company when or are in Thank own, like curious I you and up the thinking was So the point in

Mitch Fadel

Sure, Vincent.

the anything we’re a good at And at ecosystem. open good a looking sorry, that’s to multiple in – like right right right – think, it’s us multiple to on. said, get for return I I the

So I category. off cut any wouldn’t

we’re open talking it. pretty that. gone on about Obviously integration Acima, as of to We’re the smooth focused it’s but right Jay now, was

We’re months six it. into

we the because saw capital that’s – of better this you So cash the part share is point. the building, Cash anticipated it allocation. is flow repurchase than at and was

continue not take So an that standpoint, categories cash, accounts from you wouldn’t look to look of and any some up anything I M&A those be accounts – look, at of will obviously but we’ll we anything new mentioned. we’ll at national that in fund will

Vincent Caintic

That’s Okay, got it. helpful. Thanks much. for

Mitch Fadel

Vincent. Thanks,

Operator

Brad Markets. Please Your KeyBanc next will proceed. from Capital Thomas with question come

Brad Thomas

And talk great how about it be? the morning. favorable track is much add you momentum congratulations was Can let could the think about maybe continue my decisioning and hoping the the levels. some might loss Good in we on quarter you’re that the more really a the bit rates talk in that skip/stolen bit more sticky all I how me business. and a changes these little rates, you to favorable trends loss that benefiting of and more making the little a

Jason Hogg

off And This answer question thanks. is and then it morning. Jay, for kick hand Yes, the Anthony as the well. Brad, thanks to over I’ll and good

so and data So that we as is from what acquisition with of dataset we’re decision one in the about business have sciences from as group able that us our impressed components. the better of enabling most we’re two combination and underwrite is things finding us to with is use been the that advantage legacy the gives our that sort to combination Acima’s the engine of the well technology

and reduce thing our to line The to underwriting then is regard perspective customer. fraud dial resulting with and a actually, down able skip/stolen the And first that. losses is being to second able and and we’re component fraud decision from a better from provide in

kind in for a materially of results that so better us ticket overall. And

giving of the combination the is Anthony? things So opportunity, us an two

Anthony Blasquez

on those as the e-comm. business more Yes, I sentiments Rent-A-Center transitions of would the echo portfolio to

it do be important the for another portfolio. fraud And as customers. we’ve customers. reduce recently ahead of that really for more of always our the as with concerned thing decisioning opportunity things of the that is has centralized an And reduce thing And the reduce how really substantially given is we the approval well us, to introduced is part that’s larger continues a One most amounts fraud? and we’re to us and that convert go the

only can we business. has potential amount, Rent-A-Center well. well That’s with payments also not can benefited our making now ahead the So And in we it’s a go than loss as and digitally. for as the increase ahead half throttle approval ahead and helping of by more benefited the customers, and so more determination digital going the payments coming approve on go

Mitch Fadel

one, activities. thing our one the last have data Just attack you real the Acima collections as quick bolted segment, on services into capability now

So a make anticipate it to advance targeted on enables sure that we’re preventative being doing us loss to more regard side. and with activities in

Jason Hogg

really about thing – it. in virtual the side you it And be other Brad, of and well we thing continues week it’s and every, and add, business right to like get that parts of things. the Acima working Acima a I’d every basically underwriting component obviously, it and really, only the always always when review of a think is is decisioning one committee to best And And now. the decision meets think better going main improve the try

a So core getting business Acima element week. that’s and of the better every

in you Rent-A-Center, side, much Brad. the never know, On at of had problem And we year. as Rent-A-Center it’s the loss relatively new last a

even using and could versus inside call decision almost to important, the to – a at entry run Like X% and mid-Xs and our XX%, engine like said, certain of of efficiency XX% the it takes efficiencies the changer, – hear store payments verification game range. gone wages, X% on brick are costs a we you now efficiency, us can XX-minute that that. Okay, found labor That’s now beyond fantastic and hourly a the a engine customer that, whole in talking Anthony because you they so decision for of XX level to important the mortar you I up, experience it’s lot don’t wages the I store, a experience, decisioning transaction the digital the about point is, end, labor for majority mentioned, savings is with customer And but from minutes. that our we’ve the mid-Xs. mean, manual the what the customer the our Anthony

reason business. higher us experience offset are the the efficiency there’s for advanced loss for that And hear and add margin. up because of efficient at repeat in much game it about the You you pay. changer the don’t And a X% technological with e-com that the overall that business onto make And less and talking that. much than probably hours using technology to with and for more a advancements lot difference Rent-A-Center more a it’s just then better all lot a customer and of it’s

Brad Thomas

encouraging. Yes, very all very, That’s great.

merchandise front. you were I inflationary inflation little talk about that you to for how change cost deflation like the affects outlook bit the Just with how on in does follow-up and the last seeing? we seeing merchandise business? on backdrop point think Could the inflation areas consumer Mitch made many a electronics the And where an we’re years in business furniture. that even

Mitch Fadel

I product seeing And pay – good that in when on gets in product now. for Actually positive, past. negative. some it’s for right. very And our can a lease-to-own, actually even has right of odd. impact businesses we’re a is And retail, think On that be been if it’s of you pretty lot more a the positive, the that’s business, inflation more expensive at

furniture because easy seeing understand higher. – everybody But should more XX% XX% at I we’re So for it’s flowing higher, expensive good not they’re Acima products just like right? approved with even to prices, the it’s are it’s inflation, to the Acima. that more, if more Because it’s retail going it’s think by going XX% if if waterfall. of customers get tighter for retail anything, get I if prime think into lenders to start at through maybe lenders,

or month. week $X we’re on and get a when week, goods the payments it cost when at retail get also $X good a week, then have pass So in seeing there it’s on small And $X Rent-A-Center in inflation you at doesn’t at impact that $X of and for a demand the $XX expensive on much average a the good it’s segment. things

you have affect want if overall, dollars, However, yet as it’s more inflationary margin doesn’t more flows gross we’re the gross actually at more cost of because margin dollars. actually dollars it right, you product, look it, more but demand than drives EBITDA margins, gross it the the margin helps which to covering there,

be So very positive the all reasons. those lease-to-own business it in can for

for business, plate. anti-inflammation As the inflation general whole where our country it’s be an really can bad as for in

Brad Thomas

Thanks, helpful Mitch. Really perspective. Thanks everyone.

Mitch Fadel

Brad. Thanks,

Operator

proceed. Markets. Please Loop come Instructions] will Your Anthony from [Operator question Chukumba next with Capital

Anthony Chukumba

me Good congratulations on morning a allow to offer strong my as quarter and well. really

authorization, see first these back highly to your encouraging share accretive stock will levels purchase very buying the obviously So to be per share. question, at earnings

Now you share are buyback opportunistically? XXbX-X going or be program to a to – to is repurchase is going that be do going it stock

Maureen Short

Yes.

way stock in return value, flexible a to amount. And a going share generates think we’ll down the to preference are a greater Meaning fair a buy less. capital stocks manner moves the value, value. that if towards we’ll better repurchases when executing as at with to We’re for about shareholders buy

this in to new Now share be use continue times past. likely to and really and blackout want we we’ll a forward want able plan. used to authorization. it repurchases But we XXbX-X balance the at periods even to buy more with dividends within going between We’ve

Anthony Chukumba

Got it.

That’s Okay. just helpful. clarification. then And one

me not additional additional check. to that stimulus Because an that just payments? getting government the like does stimulus people credit going you guidance government month single increased as counting Are the expanded getting your that payments. additional it seems government are is every be mentioned a are payments, you stimulus tax any So you opposed child considering – $X,XXX assume to to

to that. clarify wanted just I So

Mitch Fadel

Yes.

I rest in model we there. it’s Certainly July with as of in up check impact out think, year. saw we first come the such the little the

positive, our not I’d a tax sure, model whole like no big I’m in impact impact going it, I stimulus. July. positive child little we it’s of there here. believe say a saw bunch not of but the much an if because So seen in put there’s additional is on credit. that’s we momentum be because to haven’t I impact out

if the our in positive not out will It’s and a Anthony. anything, obviously really it it’s So model. there be model, to

Anthony Chukumba

you. Thank it. That’s Got helpful.

Mitch Fadel

you. Thank

Operator

will proceed. Please Janney. with from John question Rowan Your next come

John Rowan

everyone. morning, Good

Mitch Fadel

John. Hi.

John Rowan

of idea, Mitch, a we’re you bit. of give what group of pipeline how you, are that progress who your getting partners an talked is you the national to give moving little y’all us or an is talking about specific, but idea know partner. people maybe just national a the I ultimately testing sales think us Can toward

Jason Hogg

question. Jay, John, Thanks this the is actually. for

seeing are what we full our national account into swing. would team actually now a get So, call I

in I are kind areas. it retailers – two call, have into earnings a the There’s mentioned break pipeline, in we previous e-comm. so of big we robust and we then As national

you an several which to in process have going tell partnerships I over roughly with on to comment national not X,XXX obviously fish nationals from the double that partners the retailers. e-comm can and target, the specifically, we probably large of hundred So we’re that with national themselves, includes but mid and dozen in and late discussions e-comm regard to a with big stage we’re regard side Then account the to obviously regionals.

So really amount consolidated existing there. really Acima. and with track of team national of of nice and nice making progress part talent acquisition progress, we’re picked account significant as is development a our we up news our the we We’ve it office And this now. the good

John Rowan

Thanks right. guys. All

Mitch Fadel

Thanks, John.

Operator

will from Bobby with Please question next come Your James. proceed. Raymond Griffin

Bobby Griffin

down maybe EBITDA Good And the low morning, is to in range, everyone’s my touch were hope questions. about to level XXXX. bit where I the which talked coming an margins still you back look segment. Rent-A-Center well. little you a margins at everybody. taking on XXs doing I for Thanks maybe, these margins, incredible want when

that the EBITDA they’re and and there structurally going are you temporary or So unpack structural that Mitch changes low maybe drivers confidence the business margin these more changes can this forward. of some stimulus XX-ish Andy and you or have in you can not maintain Maureen whoever, the changed

Mitch Fadel

question, Bobby. Good Yes.

it’s the cost reason is, pretty business. so think fixed cool, primary I

in like So strong. we’re is when growing, demand you’re growing

it on think get more dollar. the margins through You of EBITDA gross to as right? through, and bottom flow lot the a about pretty margins, you on below flows you not much XX% anyhow cost get in XX% every line, the bring that good range customers, flow

primarily it’s growth. So

losses in decisioning, primary portfolio say, inflation in see the can I’d efficiency And a year lower is with drives being runway half the just sales. And margin line. of digit helps more the given We ways long Now why double low an demand. But that our a the those standpoint, a demand same-store gross the even is us there’s I reason all certainly but on the to working back “slowdown” e-comm together. quite things that out. course, that’s earlier, dollars, mentioned top from the Anthony, business, the is

So say double and of I you that when giggle, bit little slowdown low digits. that with call a a a

that’s quite through, and dollars bit going biggest a it. part And so be flow all to these the drive extra of of

Bobby Griffin

is how up on But to and it the drives on it understanding you maybe – if look see go-forward So then top, already and kind impact it of comment. how businesses question that coming, already And inflation are XX.X% at there. Rent-A-Center coming to that Okay. we the numbers? starting some the a in the is the or more inflation benefiting from is is merchandise follow Brad’s inflation, type when

Mitch Fadel

I’d say it’s forward. more go

just of we’re starting to out. buying we’re increases because orders, a ways think price I our some see our of at course, quite volume purchases,

Honestly, modeled. that’s have numbers it’s think forward-looking not the I But So really in to a benefit. we don’t that date.

Anthony Blasquez

Yes.

kick We’re as through the it on. it’s and it just early see But starting to inventory system. now flows

Bobby Griffin

appreciate both on questions here the the the I Thank second best you. half. and of all details in luck

Mitch Fadel

Thanks, Bobby.

Jason Hogg

you. Thank

Operator

for time. this further closing Mitch no are questions. back I like there time call this would to at the Fadel remarks to now And turn over at

Mitch Fadel

We out believe about mentioned categories how the excited almost this Rent-A-Center prepared XX% – almost best shutdown. are you think, I flying comments. much new as growth of Anthony, comp didn’t things this your you, joining see there the last about us growth do we Rent-A-Center in we spend the side peak, going on e-comm time e-comm business, But the in over people like thank things A talking is we to XX% and is we’ve we’re and product Damira you lot everyone think ongoing Obviously, categories. Thank for the and during just talked really about. not morning. yet driving new come. product the it year

add we we’re week plan the that So announced some we stuff knocked fantastic attack LeasePay those of so it the had Acima like and Jay’s one to said, one you that add last this think three. products, park one Acima, we’ve equals I great the plan, with year to he of great really there. proprietary of like the fruition. we about that got Card excited with when plan increases Acima, think Jay their GMV. stuff three TAM. so ecosystem And really equals to obviously started since plus out is And one coming here. you forth, the The when and plus the that

up, Most could but I’ll So all probably day and how everybody just great I a go on day, already have appreciate we we Thank and your support. stop excited of there you. say, about are. hung you

Operator

you concludes conference participating. Thank today’s call. This for

You disconnect. may now