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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
Anthony Blasquez Executive Vice President, Rent-A-Center Business
Maureen Short Chief Financial Officer
Bobby Griffin Raymond James
John Rowan Janney Montgomery Scott
Vincent Caintic Stephens
Anthony Chukumba Loop Capital Markets
Brad Thomas KeyBanc Capital Markets
Kyle Joseph Jefferies
Tim Vierengel Northcoast Research
Carla Casella JP Morgan
Call transcript
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Operator

Good morning and thank you for holding. Welcome to Rent-A-Center's Third Quarter Earnings Conference Call.

As a reminder, this conference is being recorded, Thursday, November 4, 2021. I would now like to turn the conference over to Mr. Metrano. sir. ahead, go Please

Brendan Metrano

yesterday, for related results Rent-A-Center investor.rentacenter.com. our of for earnings the The are market issued all chance webcasts had to review live including to XXXX. this site a discuss Web our it. closed the after our the and release on hopefully joining you at you team a all the release morning We and materials, Thank available third to quarter link

we President have Executive and Rent-A-Center, Fadel, Rent-A-Center the our Acima; Hogg, from On CFO. call Segment; Jason Mitch Vice Anthony CEO; today Business Short, Maureen Blasquez, of of President Executive Vice the

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

Mitch Fadel

and interest, disruption of the as LTO. things in buy-now-pay-later, our often discuss We as with you are you importantly, super landscape. in leadership today morning as opportunity apps, like to leasing Brendan, can't we and environment. we new period and position of solution leasing this refer position wallets, of think have and be with for of to today, the commerce options, a payments our certainly another lease-to-own and most And we consumers we're Take, to joined which in developments the developments quarter benefit and to buy-now-pay-later solutions, on digital rapidly have and crypto-currency, great an drive from and overlap, range complimentary proliferation advancement We pleased very to good update the a you, alternative the leaders asked current waterfall. But incremental third lot the in could such threat. example, company a my see for Over Thank get actually if are in and of because to results. LTO career, our continue opposite. sales who in appreciate your the segment all customer is of the to buy-now-pay-later. today's we us believe as innovation little evolving buy-now-pay-later among it's seeing we Lease-to-own consumer it's I to

In hard most credit horizon longer average returnable Because seeing and interest getting the with with is the LTO un-banked for appliances, impact ticket payment size, include doesn't scores. solutions can enquiry flexible, contrast, consumers, approved even LTO today our consumers than buy-now-pay-later. realize advantage that of for virtual options credit take consumer than perceived of electronics, they're who higher money established furniture, is table for typically exclude and highly benefit to one fact, are seeking solutions and that the we're services In and this offering them, a growing Similarly, like work business is LTO like inclusive payment customers potential that a in buy-now-pay-later. qualify payment don't benefit consumers. serving payment partners and other durable have from an rather in the system that leaving require transactions merchant on average firsthand our of products

future, our with about synergy factor capabilities optimistic year, really we're span and is On targeted billion. to in to our our next LTO, top why that, targets. Ecosystem only made Acima achieve across player addressable a $XXX of up following understand in transaction we our and which year, The we LTO Acima the can believe of the earlier on which to running segments. doubling one leading this the and is our potentially well, can going can we're around omni-channel and us revolutionize you So, pace early be market integration

further commercial pieces momentum, for competitive favorable position, even and a those it momentum, more This hone capabilities strong you will because gain and advantage cloud-based us scale predictive enable costs solution and to processing and activities, we're further. a business and dynamic more together, on year, compelling employing is financial provide will performance. These us and mid-next activities by we'll should analysis relationships enterprise investing savings tools As a think will processing should capabilities. environment. machine learning meaningfully When reducing we to enhance LTO agenda, productivity And competitive drive our and from category more capabilities with data migrated Snowflake by customer like can to of time And capitalize our omni-channel translate growth even datacenter aspect technology which launches. benefit consumers AI to continues to to have and data and applications translate and merchant our warehouse put it. be it This we'll those initiatives in our the Databricks, managing partners. gains underappreciated, state-of-the-art

cash already EPS company should deploying strong continue and significantly increase to focus we $X the shareholder drive next position, flow We on Factoring years. will in few that the believe adjusted in financial least over XXXX, of believe capital generate at billion value, revenue to solid our mid-teens the generation, margin. that free EBITDA

merchant the the execute partners, new advanced adding a experience, retailers Now, exclusive turning Anthony on. differentiated our focused team and including value the which of partners strategic Acima, you was we demonstrates us, will Son, for and ecommerce third think number strategic U.S. well. & the it on win one a to capabilities. competitive quarter, Richard the store-based P.C. The business of an we will very largest in to other At account, find That the update proposition continued initiatives continued in-store in appliance

positive Acima more with Ecosystem. Jason that saw elaborate shortly. the also We developments on And will

industry, Rent-A-Center across grew And owned revenue vacations generated Our people XX% on and Typically reported is a other the $X.X segments. household of third words, pro quarter goods. tend durable be the of less good year prior with back-to-school the year-over-year XX% of GMV period. in September. we forma forma focused quarter business organic at a in growth billion year-over-year because to basis, we the end the Acima portfolio calendar, pro basis, up a as third and season if had growth XX%, all on for lease-to-own year-over-year, and XX% was on slow Acima

winding stimulus, was months So, even other of heading of well-positioned consumers we're the quarter, that pleased third even programs are we remained trends for to we Adjusted for supports with and XXXX. believe With and strong fourth see for the with last quarter momentum which lease EBITDA favorable was some top $X.XX margins margin the portfolio our year, XX.X%, very down. line to earnings consistent result few per non-GAAP down compared early the less $X.XX of year. into activity the to payment winding was Non-GAAP the with share on sequentially stimulus related pro from per our in quarter, contraction. earnings favorable and the in the second in seasonality We'd call, customer expected down share quarter, second in forma August. remarks would prior earnings quarter,

stimulus primarily Acima reflecting XXXX forward, guidance, partners on we full-year customer updated chain down, winding in as normalization merchant of changes the due well supply our to have some from looking activity global business. impacting as primarily Now, timing the in disruption, impact payment

labor, activity frankly, We our of they caught short the in the faster on normalize little to catch-up. customer normalize we Quite payment expected. and had back-half a play We the to expect than collection got year.

quarter since We our the and I Acima steps chain at partners, taken and in for this XXXX Even normalize. range guidance. for to second The staffed stabilize has fourth trends at up still the our also within supply lowered forecasted. had impact our with full-year previously increased we revenue is we combined issue, August, them headwinds with two outlook we for when quarter results, are and affecting EPS retail margin provided Acima revenue those non-GAAP payment where XXXX with And consolidated Acima's mentioned, growth. than activity to of expected timing-related about as things have our

additional we still it in August, and Maureen now. minutes. on that So, provide discussion will here guidance a range in we're few And within increased

I'm members the So, in quite to a continued really thrilled in past It's want opportunity few thank in on business. XXXX, to the and with I'll the to years, over the future. over the the journey team of that, I us tremendous see all and been made dedication. their closing, the call turn effort for and Jason I With the update Acima we've progress Rent-A-Center

Jason Hogg

This Picking about people which Mitch. and benefiting products the buy-now-pay-later, your is meeting up way financial see innovative opportunity, Consumers people changing Thanks, it needs, and on how really are traditional and alternative aspire. landscape, services like like value uniform, the over and exclusionary. rigid, today solutions, increasingly Acima. that business personal, is paying are for market to think the other even flexible, they services services, amazing about are and that payment disrupting and comments the other lifestyles inclusive competitive models

Acima in our acquisition, for and in this Acima length product drove Ecosystem second discussed As tremendous to out, the ago, have strategy, quarter launch our Ecosystem, reframed we our develop Acima company's with early announced opportunity Marketplace, an validates over conjunction Acima at us LeasePay as the the These we the a the Acima We extension, call, year Acima the that we're August. play App, soft on eventually future. that and browser same trends witnessing it including Card. some the suite,

the mission some users which from our this into unused ecosystem. amounts. Keeping the that share had and stage, the months. at getting for potential focus were has we've unconverted the at Ecosystem, users findings. for launch, in seen largely reinforce early end The in XXX,XXX of or the the quarter, control broader already approval transformative discussion of are customers the either is Acima for active performance of before belief The that over preliminary I'll three results learning, primary existing has that App, our testing comprised mind a So, been encouraging of insights essential

Twitter, believe one To of months we are took Facebook put and forward, perspective, that the second the milestone. respectively, Looking in million it pace XX this to hit during on user we threshold and quarter to XX XXXX. reach

Klarna milestone Among conversion active these leading if users, line in reach Afterpay around companies X with compelling some right So, months for are months, like we to X the Acima. and in fintech XX million projection today's download our rates. seeing

higher significantly the customer, For instance, portfolio per than app average mobile users X.XX leases average.

this believe is of of the we While customer. expect the to adopters, exuberance ratio this of improved ease leases lifetime we access early reflective of increase per

value insights including payment that Acima XX greater mobile last feedback two the expanded who as As different utilize similar or the options we the portfolio that like customers "Easy the "Working seen transactions customers and complicated even remains This the choices. grow pending relevant relationship average in merchants a get technology driving bring than LTO with back to the more merchant with early retailer. just sales use a access revenue seeing over Acima to offering otherwise them launch acquainted from compared like another aren't to ecosystem the incremental data The and decision Customer merchant to heavy have BestBuy. we who lease-to-own important is without locations, transact customers, helpful Switching size investment retailers. these preparation to significant the up customer has we factors than partners experience" generated potential for the Acima and resonating integrations. not plan the ecosystem ability app also customers with improve to information" ticket brands for XXXX. average. can via to by with can to activity delivering have are providing Acima ecosystem are other illustrating incorporating ramp to X,XXX are the suggests is XX% in rates demonstrates side, and of those to our may rollout value offerings with integrated more not merchants full and providing allow conversion "A Since into across have Rather form engagement early able the patent existing with transactions months proposition the Acima's do of customers payment customers." been To-date, provide intermountain wonderful ecosystem, with over to

fourth efforts re-engagement mobile release application product. its customer's streamlined mobile decrease Acima customer leases of include process, just customer drive a see the our volumes we retailers. and Moreover, learnings for For to enhancements as consistent continuing the app costs our embedding mobile and to iterate to the are example, well refine the as per a to app the and use marketplace, lease expanding apply return number customer shop grows. XXXX. lease we'll further and the had adding device through we and on presence store into our $XXX taxes importantly, improve a continuing per location ability transactions to process, apply efficiencies the We've To-date, from to ramp under acquisition our experienced functionality, opportunities texts the marketing those lease increase, conversions can execute create now in-store in Most adding we an our to and app.

it's card the It's to next So, probably of of database effectively material P&L consumer profile X to the that the project over to scale timing from durable Consider increase really premature but an conceptualize data million network years. consumers five the merchants XX easier lease the the we The competently three encouraging, sold. impact. are to preliminary XX,XXX pay of will a the have where over opportunity the target Mastercard approximately is Acima merchants of goods who fit customer. Acima Acima million

the time, year. the right the terms physical already same on X,XXX in we structure In of commercially getting well new Acima partners steps, organizational capabilities. during on the adding continue we and operational to integration, Acima At available. next we pilot pay enhancing place progress broader made of the by a to card execute track the retail in the performance, is end quarter. significant are the card And virtual lease over Shipping

including our the digital we took leveraging Sonic proposition; P.C. than ecosystem & from back and Son ability retailer customers, enhance our enhanced more retailers through competitors, value to addition, acquire Electronix the and the app. mobile In Richard engagement XXX by own

our an We any signed an ability to also e-commerce exclusive with is demonstrates and which Whirlpool, partnership win channel. relationship e-comm

All the high the sales integration partners, are of Acima offering. factors to is our we're for which equate preferable competitors a rebates our these seeing as incremental The priority to retail continues be million in $XX quarter. gone plan, and the expect synergies. third realize ultimately XXXX we to and of rate to in million continue for It's generally to according million $XX synergies $XX to run

this virtual included Acima are initiative often and stores former should conversions to quarter ultimately partners organization more a was undertaking cons This Another also under activities locations converting top translate profit finalized preferred facilitate among market a and staffed Acima locations. seamless essentially for aligning better of We not others. major facing coordination corporate enhancing, was converting merchant lease but and activities. and The only to and structure the and leader Ashley offers because better experience. related key one consumers, support to experience flexible

asset and report development with the Schoolcraft. who one Uriarte, Aon at And product data and Digital Tom services technology management So, to and strategy. He's place a Express. as be execute becoming a oriented right continue we the the a fintech Acima will American business. talented path for successfully in our I leader pieces down have to our joined recently Ron Chris organization worked report and product company. at to technology I operations believe on Abel. sales and leader, digital Chris to we report huge of

transaction pro and government the retail performance XX% the to financial growth third consumer quarter skip/stolen behavior on forma winded will supply grew led year. quarter The accounted retail a Acima GMV results, for revenues EBITDA was to were chain margin points XX.X% volume, and XX support business basis face changing the as comments approximately Adjusted up of including my reflect Adjusted this XX% in lease partnership. prior of included XX.X%. partner basis. in on gain headwinds Moving momentum as XX.X% by was E-commerce versus Wayfair the forma pro continued down. financial X.X%, year-over-year losses

on sequential his the would in noted anticipated normal third for customer As would start customer that activity revert to impact payment basis. which Mitch trends and margins more to a behavior negatively comments, quarter losses, during we

right. the decline under expectations discussed Our directionally sequential Mitch factors extent were earlier. anticipated of margin to due the Though, we

the to ensure over With strong to turn objective to top rest is I'll start well-positioned forward the Looking it our Anthony. for business year, a XXXX. of that, is the over

Anthony Blasquez

proposition for positive growth generated of topic business, year is the Business we are fit that XX.X% a those again with growth, But with third and the our been and X.X% in quality it against performing. Staying of growth Jay. segment flexible the double-digit This much quarter XX% just growth period. illustrated the same-store long-term. comping Thanks, in customers; quarters people close it that XX revenue to underlying makes which surprising was the of have a the there sales and sales opportunity of how products, revenue is five to consumers X.X%, to testament the growth great we growth growth we including quarters environment and to changing solutions and offer was consecutive well how same-store today, and consistent that are prior know Rent-A-Center experiencing us has the unique same-store value consecutive everyone same-store may high generate experience. business be over to lease-to-own how some the just That solid fundamentals

growing are quarter over third a has XX% it E-commerce substantial in Importantly, the third and year. our in just XX% to that relative the the we a past revenue, quarter, our e-commerce evolve revenue of the played platform of with preferences prior year increase as XXXX. grew accounted in growth for X% meeting XX% left a to continue a their performance with In role half. consumer omni-channel and key the

in the channel. of in in including collections long-term quarter. believe opportunity e-commerce the year-over-year we sourcing for team's growth strong the product, The we and to the remain early the marketing, merchandising Importantly, execution, capturing XX% translated innings third portfolio

heading the solid of loss expansion decisioning. think, we're XXX position also wind in for home long-term, XX.X%, interest options. start making consumer expanding due remains feel solid the basis stimulus. basis great and EBITDA stretch over year-over-year, normalization believe adjusted Longer to we into the affordable in around to be in quarter of rate well up of So, that margins on a X% third with the to points despite positioned XXXX. points this year term, Profitability XX government improvement following collections I flexible the down should and the we're We given is our rate and loss still capitalize trends the business in of payment

We consumer base have that service core still existing openings, surgical footprint our through specialized to concepts, a have considerable provide people's makes a relatively our in every whom into product business a retail difference categories. opportunities lives to We new new expanding and in large we day. store expand

opportunity e-commerce tremendous have that we leverages capabilities. differentiated our addition, In omni-channel

holistically, While we allows important prefer experience. e-commerce transactions provide will last especially our future, lease-to-own our sourcing for customers an us customers having brick-and-mortar mile e-commerce the consumers feel brick-and-mortar of in a cost, Moreover, the purchasing still business play for channel. establish at wholesale because including today, is the in-store critical competitive in product, role as to participate many just to and our pricing to ability logistics

employing on year. the the over out e-com into enhancements, well set Maureen. now about focused continuous tactics few we're turn us should set feel over up initiatives environment engagement and the months the and and such as next support XXXX, believe call improvement business Looking customer to we I'll next for very and of good

Maureen Short

Thanks, Anthony.

October, quarter and as quarter $XX.X mix while This headwinds third normal results and payment million reversion revenues more government the second XX.X% X.X%. the rates out the corporate we XX% in typical $XXX to some Reported segment quarter, in basis, of in cash for has million, average and million payment $XXX remaining the solid $XXX an times business delivered we the XX.X% million. X.X billion, payouts. million anticipated revenues debt stock approximately XX.X% had and of basis and XXX of repurchase period generated one-time down of debt the adjusting of the for third related and After prior consolidated through franchise that of special The returned the net to repurchases. compared the we $X.XX third closed increased shareholders prior acquisition. Year-to-date despite tax margins cash grew for billion EPS shift in that share period. earlier, XXX company and forma activity, delinquencies wind period. the end, favorable interest not consolidated ranges of EBITDA quarter, in of $X.XX grew costs year diluted normalization at XX.X At million. quarter $XX year $XX adjusted the the non-GAAP translated the company leverage and to balance was Margins year-over-year and a adjusted including rates a in compared available October, was points. do pro to third down XXXX Acima re mid-February. almost dividend $X.XX noted Mitch Much the to activity and of that customer Acima per its through acquisition prior was seasonality the segment year-over-year and year-over-year, a of financing XX.X% the share. we GAAP loss third loss prior Mexico rate $X.X on were period from on stimulus, in basis $X.X of called to EPS reflect doubled. to and non-GAAP million current business. quarter contraction early We of $XX the Below flow of call million to some integration. line for a EBITDA third items quarter that business, margins from performance reflecting margin repurchased liquidity compared XX% the on was free gross underlying year end authorization. year had is growth the of On was attributable the million growth share Acima Acima a in the the of to quarterly high a all as was quarter the cost attributable in At effective net well and XX included over compared to in our count Rent-A-Center of to primarily $X.XX share The $X.XX believe price were segment, expense common for transaction customer As

Regarding non-GAAP previous and now revenues million end our expected financial Guidance billion be of the cash flow outlook guidance billion are to our revenue full-year $X.XX $XXX to consolidated the million range million we adjusted $XXX within of XXXX, is for $XXX to for of to EPS and the for EBITDA consolidated $X.XX free ranges lowering high now $X.XX million. $X.XX. We to between and non-GAAP expect EPS. of of $XXX

in had headwinds expect For our Acima billion partners more for supply in $XXX pre-pandemic payment outlook and back retail the rapid the chain supply more XXXX EBITDA and and expect XX% approximately Acima segment, margins chain down we to GMV to still performance we revenues forecast. more reflects growth quarters wind to to government continuing due loss couple top-line over are the previously $XXX and in million had both We we incorporated normalized metrics, $X.XX anticipated to of that a million. with of the programs activity QX. our annual then facing gradual This in and $X.XX adjusted spending factors, which of XX% customer billion had shift the supported headwinds reversion next those of to pandemic. lease consumer a trends EBITDA XX% generate impact Even of during reserves margin

mentioned, be the external should longer internal this of largely remain fourth and, and targets in the our confident company. as adjustments term for Mitch beyond Looking the quarter, set business passed we

business guidance midpoint still we billion wage be to be million implies QX last Adjusted the in adding again increases of QX $X.XX despite still $XXX EBITDA of the For billion segment, expected EBITDA margin Revenues expected is adjusting flat Rent-A-Center an between sales between million be counts. in are to guidance. approximately and year our and sequentially in prior and to and recent and expected double $X.XX not growth head digits. is same-store low higher $XXX and XX% than are

Turning capital are unchanged. investing in our value business allocation, growth. priority top our The appropriately is to funding enhancing and priorities

Next, we M&A combination generate With financial we will returns. we remain capital committed past successful share a that at repurchase. dividends needs, opportunistically, structure in After a that share huge through over can and our repurchases favorable of months. To return were to supports opportunistically my conclude sound investment engaged comments, employed company a look the to satisfying our return third total growth undertaking efforts been has of strategy shareholder the piece objectives. XX and quarter the shareholders

the integrated on a letting We and organizations have two completed up company's the largest without we execution acquisition in ecosystem. and developed history, payments are launching new fintech

and more course, create evident. to evolution we should compelling come. this late stage our to shareholder for the become year of planning an highly also details more excited QX very next to think, for next I'm were opportunities in I we forward, positioned Day are Investor Looking well announce values and,

file statements XX-Q your for your you our We and today. Thank I'll for call site our morning. later detailed will income to segment now this time the Web questions. post over by turn

Operator

[Operator Griffin first Instructions] Your James. comes with question Bobby from Raymond

Bobby Griffin

Good morning, everybody everybody. questions. Thanks is taking for my well. doing Hope

Mitch Fadel

Morning, Bobby.

Bobby Griffin

kind you don't in just but to talk that payment the it just activity would bit I and kind Or it typically you in little helpful, normalize, how into up a are of And now did things the that's basis, assuming did continues just get month-by-month skips/stolens what forward level know November that and about it quarter? the to are October, starting of to type be trend wanted that maybe First, fourth color, out during and then quarter? of December? you're build back in assuming carries in

Mitch Fadel

really got away into collections -- Bobby. the news good good up we question, the in It from got up trends from we seen got farther from good center, caught staffing as as went Yes, as staffing October. stimulus. that as the standpoint, ramped standpoint But we've is on, in the a deteriorated especially quarter October, we

that us gives was forward faster So, But that feeling -- us a blow. than and certainly going it's it forward, the normalized short-term that October gives we thought. a confidence going good going confidence, we've forward,

Bobby Griffin

And revenue customers based unpack gross on secondly, really the and got after for opportunities helpful. is an margin longer-term, then within Acima I as that that's business Okay, a and obviously business, help where you move lot see the growth. just -- around what -- some us we inside more know good just can margin P&L outlook stuff. Maybe the are,

out, on there think years are? two, parts the of and could what maybe, three margins, So, we some moving be just where as those upside

Mitch Fadel

When things at look are I talking the and at the that Bobby. when there, Thanks, was got some key earlier, that we've Ecosystem. some you differentiators of particularly about look you out

having the costs regard So, per the us having of increases expansion in customer to with when to get customer enables while margin leases is average number simultaneously declining acquisition that regard. ticket holding,

drive critical. but have taking Electronic, so, as now originate And origination had optimized we Whirlpool, ability the getting we the continue relationship retail this place [indiscernible] as we is because locations, them through there own originate P.C. on Richard, having and Also, bring mentioned of partners, ongoing how sort to you're like I more coattail well a traditional on our to customers, effect and that's experiences. have not towards only and

Bobby Griffin

and -- then Okay,

Mitch Fadel

I'm sorry, Bobby.

as and that, business, stores early about road, is staff those half The do the other with forth, well haven't half to the and it when in got in long-term, that seen the business, those a we'd can decisioning, would lower little platform, a it's in faster so think Acima to legacy next And be in numbers, you've the down we business Acima. our legacy in converted to over we we've converted, reduce our as yet. bit what year. and the losses the expect, convert as And of legacy I'd stores other and add thing the we

as the long-term forward, staff opportunity, So, think business anyhow. expect the we of that's I we synergies has go some part

losses So, lower overall, you'd as business, think well. I in we've see the

Anthony Blasquez

perspective, to so optimizing get yes. by every AI, using, every our Yes, talking and then as we're going from crisper channel, to about, learning machine was and channel, underwriting every product continue that Mitch partnership, an continues

Bobby Griffin

Okay, was my helpful. that opportunity. that's the Mitch, was follow-up, actually labor very just

it, in here and the So, quarter. queue answered back luck ahead and appreciate time, the fourth I'll the I of because go best you but jump in

Mitch Fadel

Bobby. Thanks,

Operator

Your Janney. comes Rowan John with question next from

John Rowan

Good for current in through, believe you're undertaking. your out basically morning. Just what currently I the was that you. there guys a Thank remind XXXX? included you Can and guidance was run not that number from me of because objectives excluded that included is lot

Maureen Short

Well, excludes the any share repurchases. guidance

guidance. really that's And when the so, comes to it stipulation but our only

Mitch Fadel

as year at growth Anthony the single-digit there. to to got include synergies we $X with we're get to that XX% But to And billion track it's because talking -- up mid-teens that XX% years it $X And achieve. at to year, quite the GMV that XX% be portfolio, margin, EPS growth is look in XXXX, tail EBITDA mid least from running we try then in EPS And next coming if the single-digit it's got us couple really mid would that got It's John, achieving certainly you'd billion year-over-year. mentioned, the Rent-A-Center in EBITDA margins when at growth over say to business. an numbers. we're not low standpoint those into expect on still you business, a there's back

those that are talked about. we've the assumptions So base

John Rowan

and/or retail spurred what fintech But by additional omni-channel about platform? big growth partner wins the

Mitch Fadel

and the don't will follow-up a seeing mean with -- stores great the he in we know, or in and What the I assumptions. million don't point, doing we not LeasePay those make not know we is But that's results, Jay as that's transformational. forth, in we're is -- bill really to it's where even year hard it's that that in XXXX? good have mentioned, Ecosystem revenue to in. really think is some it At addressable $XXX as next we're And $XXX I question. in figured marketplace, we total out, this know transactions how integrated pointing or trying worth was so market we're exciting, already be Card Acima in. million Yes, and big

is you I it But it's when strategic going the Acima -- think the accounts continuing that certainly on to way. that upside add XX% think there's it's certainly to -- about Ecosystem, far to take for XX% as number, good as sure.

John Rowan

you. thank Okay,

Mitch Fadel

Thanks.

Operator

from question comes next Your with Stephens. Caintic Vincent

Vincent Caintic

Good morning. Thanks taking my questions. for

the think going you're And up is run-rate one-timers third But guidance guidance, reserving we maybe having guidance, trying quarter the and I the maybe I look at of into not when EBITDA quarter, as -- maybe in any I just of then about fourth change anything margin about I is seems the guess XXXX you normalization maybe first, giving or sort next yet. to year, front. rate might kind So, understand expand are run because into the think credit there's when it XXXX, fourth quarter-to-quarter. taken there quarter that like

if kind about just that modeling year. we be anything I'm of to thinking think the wondering quarter if we we're next when fourth on about you. should Thank So, there's

Mitch Fadel

ahead, -- go Maureen. Well

Maureen Short

the into activity are that what customer I to business Rent-A-Center in be reserve we and was well just both some going based made, Acima mention, future. to on think that meant for reserved there were the as business, is adjustments as trends, payment the predict should loss

So, there one-time that were some normalization. for made adjustments

mentioned our over we prepared a that happen 'XX. we maybe expected of As even quarters, to normalization comments, slightly into couple in

a there of reserves year better this made should now. taken for have adjustments those that would some we we've up us quarters 'XX, likely some since that taken So, couple from set were

Vincent Caintic

to a we to be how fourth helpful. of there turn Okay, thinking -- that's quarter should going kind is about fourth the was kind I of there we're And, is proxy good forward? it about guess, just quarter in else the anything when going thinking the for or

Mitch Fadel

we're this if, comp go account, last as future year, growing time growth you as about last year about a think and think added into XX% And I at the talking the year. like to GMV big a starting over Wayfair still, Well, business. we quarter, you're of

So, think two you're in, continues then like what you you accounts in little steps the conversion, But take Acima back, was and doing Jay coming to to when last forward. and bit, mentioning. got the drop that time fast And any But step one system no Jay, take drive you would converting got short-term say, can X,XXX quarter. the it, GMV that's new accounts decelerate store the you about the a you XX%. some the a like

large lot you're over other Richard, good in Obviously, large it So, ins Northeast unless outs real and kicking addition. a that exclusive November we're comp the comping of signed additions. them, P.C. about an we a you to in with and off feel have there's just we the And not there. here over going large retailer

appliance they're know country. retailers the top it, the don't of in one who those XX For

quarter stores but just give about ending got like lumpiness, today down And Acima third the Ecosystem, we so, of about rates, the margins kind the stores, overall, here I you're way the growth a winding think stuff quarter all when the growing, to that's of we're a growing if we and went added, like even we new Vincent, stimulus though normalization faster, a or quarter there, quarter about, the we because went down, when light gets but talking XXXX bit lumpy on guess But or forth. happened. mean through can stimulus so little chain that a as and the even obviously, you those it might even, not have take it overall, on business, XX% growing some a but XX% Supply caught better. you when staffing be of you talked

Jason Hogg

the the Mitch new them. it's the what then your products like in is function. mean that seeing I we're the lead there's was step with a ramp wins, to Yes point, and But a gets saying, competitive indicators are associated marketplace,

an So, their rate they once see normalize sort get of exit acceleration, you they when to out. velocity to start

Maureen Short

There's seen in haven't also additional the full place we're that finished take haven't assuming integration will yet. we we yet, synergies that 'XX

changes we're the and those of the seen It's that of the news some But normalization with rate. is out. made this it synergies because just seeing year good normalized seeing those play Some some 'XX that normalization. be half in we've little were a of we we're masked that of back But that growth, should choppy. of synergies occur a strong at the

Jason Hogg

Yes and long-term outlook. nothing that our has changed

Maureen Short

Exactly.

Vincent Caintic

talk exciting video well interesting, marketplace. That's that I then perfect. partnerships, about taking of on in with, of really can kind as overstock.com, interest was and really question [Ph] little on that a Okay, on saw And to they're wondering But Acima. it's got seeing in pipeline I you the it your that. of there And you that touched as a Acima, and could your merchants for follow-up you kind maybe Thank kind later such Stone] a as Depot, of pipeline, answered of the there. was buy you site about even you've marketplace these talk Web you if so the got you're helpful. pay an now bit. a data, and Home bunch really you really how see And in Ecosystem interesting partnerships, [Be if BestBuy, lot

I the about talk of Thank So, merchant as for may be like what's well if pipeline, could look you both terms you. timeframe partnership the, the in sides. the that? guess And side, as

Jason Hogg

Yes, thank you.

interesting we this address. pay solution, a now of thing, become partnerships, to couple of is, it a and see as people take look sort more order. buy the a a set, than for you later that I'll as we segment as the complementary sort different saying addresses quarters at So, used reverse what in When now we've of been

And so, accustomed getting the for alternative more having people solutions. these actually us, effective it's to

And you so and very like environment, a to With that's itself, test Ecosystem the had reason. been type about. into talked we regards feeding learn we nicely our ecosystem, are a

like So, we rolled over active with users. talked I app, out the about mobile XXX,XXX

have that the to we seeing that volume going having have started now some our what apple then experience other be ability we then to mentioned, But where despite whereas our areas mobile bites the with continuing on effect succeeding, important store. to mentioned, customers take Now a that the our to before we're line, back to Mitch store. them. And merchants walk the we're our it get having free efforts can are to stacking going come on and what and we're not they app thing that you integration. add so of we've to and and is start other just their more as market we've they to We're leave leave, marketplace. friction in the the is very they're do at app out, opportunity now because to to mobile gives now you'll fantastic embedding from the importantly, the the the we the very in to that metrics, our it standpoint, a wins a accelerating merchants see we're of native into all to when And customers launching through having execute consumer executing phones transact continue of in in, continue XXXX merchants allow tested versus one

of that'll so, effect forced sort effect. of have a multiplier And a the

then and consumers Mastercard, briefly was would which also thing I I Mitch we talking and about, the as the our on and base larger of platform. mentioned a say, last build So, pay lease larger

have them. more allow We opportunities to

important physical base, piece not when it in of plays, helps spend is our described. purchases national to have with that X.X only another partners once other similar. their we're we is why heavy solution It to solution discussions them card or means But going And very at view moved ubiquitous location. us the consumer makes like or credit locations to integration. retail the means as for how with ability completely plastic on just with our make So, you retailers, large not a integration. a have that having ability merchants helps has the to It customers for debit it retail direct-to-consumer to start we that million their into also any in changed a just the card having on us dynamic those the that's

Operator

with comes Chukumba Markets. Your next question from Capital Loop Anthony

Anthony Chukumba

taking question. Thanks Good my for morning.

assuming That's Just like the word right? also accounts one doors, first, that using retailers, stores. quick and disparate then I'm not X,XXX X,XXX you you said just X,XXX keep right. of X,XXX point said you stores, that's clarification completely

Jason Hogg

That's correct. It's X,XXX doors.

Anthony Chukumba

Okay.

my of at mentioned this number, point? you is, Acima what's so question total given the since guess that at X,XXX Can that? I fact So, the you've doors for disclose number

Jason Hogg

XX,XXX we like and made in previous we I say I comments, to talk No. size that. the my Other as over don't statements mean we've right said, now. than about

rate a at pretty so So, -- that's significant growing still. and

Anthony Chukumba

get activity. Okay. so just No, normalization fair to enough. And the then, collection okay, just follow-up, last the back to super wanted one

want I understand. sure to So, just I make

be like So, their to the was the off effect had you collections, aggressive been aggressive as need because making didn't doing everyone and basically sounds started with guys hadn't from and as maybe to checks the stimu stimu and wear feel checks payments buyouts. it or early

of people it go sounds hours so do you allocate payment customer that understand more activities collection, like to more those. you or now exactly means. the that, hired just combination And normalizing to a or trying after what I'm to

Jason Hogg

and out it side. on then start pass side, Acima the to for I'll Yes. Anthony the Rent-A-Center

short, little Mitch So, taught is and operations being accelerate. converting about what a when talking were bit the we we're talked in see to started so over normalization about when our doing that's we

ratios is So, load. account loads regard come line from we've seen with our delinquent now a staffing what account to back in our

that guidance exit provided. We'll velocity is in that key the back the so, with for we've line And our XXXX. be

Anthony Chukumba

you centers. call -- [multiple speakers] talking And are

Jason Hogg

have correct. that to And we of were is then is those enhance other a the having us collectors. benefits of the has to with streams enable other And bring general other able That's we've the just number one that thing online to brought Acima then not are nice portfolio. automated, the platform

So, Anthony?

Anthony Blasquez

Hey, Anthony.

business, perspective. the softer historically from third a payment For is Rent-A-Center quarter the

the and people as in to going before vacations year we that get bit yearly So, right down and wind know going the quarter school for school prepared begins. a third is ahead go

checks enhanced was had their pocket, right, So, end well. down. to We ultimately that knew those unemployment knew were as the stimulus that you're we going winding but in people

a throughout go measure staffed actually the and get we up back headcount year-over-year up, X%. to proactive quarter ahead So, took is

you're But only opportunity flush from this a harm we the to in go occurred. us wait-and-see, portfolio occurs don't when to respond, more ahead fourth We right, the that is and there ahead like the period also a it So, well. that situation perspective. in sets ahead because we is react, don't pocket, quarter for balancing make benefited as of unique sort were cash with normalization but occurs that turn normalization go and occurred customers the is, their and to It the that up not one that overcorrect almost quickly. the like and go act it's sure when want also that demand

went historical loss we like very indicators, about quarter forward, seeing normalized and we're X% what I feel continue that the fourth feel we ahead, said, going will confident confident the we for we and So, leading trends the our now rates, and that. around

Anthony Chukumba

good work, up the Keep Thanks. helpful. very guys. it, Got

Mitch Fadel

Thank you.

Anthony Blasquez

Anthony. Thanks,

Operator

from question next with Thomas Your Brad KeyBanc. comes

Brad Thomas

morning. Yes. Thanks. Good

that last questioning. follow to of up Just on line

that Rent-A-Center in in go level annual and side, your the as we detail range at X% just think look on still of any the would be into great. competence the XXXX, you can that So, on losses be you

Mitch Fadel

centralized of and the the communication numbers. ramping reason have feel of a initiatives that pre-pandemic stores, about byproduct the lot, we right confident. tactics a normalization, to up addition And going normalization I the going customer we're all and that that customer I as pandemic we back do do in expecting feel employed a that payment occur way about it now Rent-A-Center our what Brad. from Yes. that that Thanks decisioning can And is that's that now seeing of because confident digital business I not Yes. happening. go we're the in off of that's there the perspective, payments. when you expect inside I'm to to at available first And we is to think look the then

go-forward what So, -- around things X% X% when together, you me the put for of the range makes in confident RAC. those be that's in

Anthony Blasquez

of now store. happening XX% Almost outside payments Yes. the are

Mitch Fadel

XX%. yes, Yes, approaching

that. good feel we about So,

Brad Thomas

the And to your Jay consumers… confident don't violent a Can how XXXX? overly this is Jay, more the side, quarter within make you mean, would Acima in down on mix. perhaps I line sight little losses more has talk trends the I to this the Yet, the having of and expected. a Acima get That's still happening in algorithms you And a for what really normal back just seeing move you think about on sure be partially the helpful. the call, this Acima side, and for than maybe we're sector similar others from of faster normalization question been theme

Jason Hogg

The loss thing at your of with overconfident by Yes. XX, rate at break partner. our we're product, underwriting kind XX don't this When look around down to we by you virtual projection, the book. somewhere by a is ability within end the regard is to how looking to X% up getting channel, X% point of it normalization key to

lines. not is optimization monolithic we constantly And on is looking that So, meet and the for decision just machine on there but population engine, then population track the to that our while running and along one and in exploiting we're basis. portion AI riskier our real-time portion a regular good learning it the of minimizing able the of

Brad Thomas

you XXXX? Maureen, we And us you'll an if much missed can on update it, on I How helpful. fourth for year-to-date but quarter and you synergies? in Really I current apologize plan where just the stand give think your get

Maureen Short

different a were about. We of is initiatives, believe which the number achieve There we'll about Most that year, talked of million quarter. extend but to talked show the part rolling of XX those by million. within some why of out which a end anticipated the has we still others XXXX, rate longer-term occurred, to we've we $XX we already the had XX we are expecting benefits run of through million in XXXX fourth what of within deployed

There's make synergies. to better get business preferred or with lease mentioned I companies margins achieving together EBITDA the like us So, with of feel timing normalization, that two but very the us bringing we track with Acima, mid-teens still a the the been year next offset some those those confident we're integrating will over earlier, on two. company, will

Mitch Fadel

you where the I this future lumpiness comes future, of think are think thing, when today, lot tighter what is the we credit morning about of compared other the environment. that as to of about the remember with normalization questions, a the Brad, obviously a payments

the talking in on already credit of beneficial stimulus. call by our, Jay to certainly what decisioning our and without -- run us same do environments to there the even in they're seeing remember to we're that how there tighter talking needs You're in vertical our but long Lease-to-Own short-term we we benefits -- even are business where going long from And just retailer of the -- above in We out a and decision. vertical tightening and in if out VantageScore. it us. in there's run, not, own is that And business credit tighter by by Anthony's vintages, some the in about

you'd our that call people come worthiness, slight credit we're uptick portfolio, As VantageScore. in I guess a into it customer seeing our

expect things, You'd lot we're but remember short-term, the go in would even impacted benefits is call third and fourth long customer needs And better the -- a different that we us run, and quarter that accelerate just it in the a quarter our a environment, LTO. we tighter though seeing we get the this already. it's everybody as gave, to to guidance credit in and we into of something but

Brad Thomas

thank all Absolutely, so much. you

Mitch Fadel

Thank you.

Jason Hogg

Thank you.

Anthony Blasquez

Thanks.

Operator

with Joseph from question comes Your Kyle next Jefferies.

Kyle Joseph

on for scenario, Thanks horse, in there are taking just of the in sense performing morning. envision good give economic credit dead business and like obviously, any normalizing. GFC how in a like the that? Can beat environment and the questions. for you a offsets then normalizing us negative the Rent-A-Center it's environment business but potential then my -- you how a Hi, remind side, Acima to us kind credit an did Not the

Mitch Fadel

we that years environment over as they seen with XXXX an think, think credit about and the like and I both Yes, that We've as go Rent-A-Center. outperforming XXXX tightens. in certainly

the go just It's of go not through in forth. about had and XXXX worst and in only very in of outperformed the retail company comes similar, country our to you we XXXX it's should and very, it one If when growth to so up -- certainly losses I revenue, partners. the the Kyle. And history back good same Acima everybody but didn't recession be the business. in mean, rates

own, through Acima it's same but stands leasing on we and still those the course, business, re-rent the -- stand products ecosystem they can return can still Rent-A-Center. can Of where product the it's its

technological -- the store, credit where resiliency and that to credit from the in Rent-A-Center a not sure I tightening call there center centralized XXXX recession not in the thousand good to they faster react keep the annual a Acima be recession necessarily of the at tightening a that is much couple So reduced a Rent-A-Centers aren't in people out you as look standpoint guidance long on a when there impact the paying, guidance each forth. mind, will we're in -- I'm virtual in -- mean, street. having on store collection through If Acima run. collectors payments and Rent-A-Center be Rent-A-Center, and can but country, we have in on so XXXX,

Rent-A-Center So, long-term, the the tighter the Acima the both benefit less impact much environment. going be overall this than in normalization when should from third credit quarter is But on was to the when faster. happened in

Kyle Joseph

business, the is there? inventory positioned up follow me, impacting the holiday That walk Yes. talked into obviously, you supply but through the side then your makes sense. how And impacts supply for a us about any season from Acima, just chain, chain heading quick the the of Rent-A-Center

Jason Hogg

from strong the position prior We're levels XX% inventory rent Good for major categories. held up Yes, in ended a versus Kyle. year. with all the quarter the actually

from partners So, but just items done it are the We're remember still before, said we good a customers on and go like able whatever deeper buy want that things the we to handbags to et source have are sourcing we're staple our categories merchants make because showcasing looking we're sure in strategically and Web that's tools have the that to available expansion the the site customer and that tires of in And and the get. though that SKUs, online ahead that can seeing and them, we perspective, for for well opportunities inventory. assortment business, there experience And job expand good customers the we've as vendor Rent-A-Center for e-bikes, in a we're fewer to so available. cetera.

held confident, those ramp especially up fourth meet we we'll as time loosens with up quarter, demand of chain to supply as the So, rent for the XX% that being on but year-over-year. feel up, overall goes the

Kyle Joseph

very Thanks for questions. it. my answering Got much

Mitch Fadel

Kyle. Thanks,

Jason Hogg

Kyle. Thanks,

Maureen Short

Thank you.

Operator

Vierengel from question Tim with Northcoast next Research. Your comes

Tim Vierengel

seems like operators. thank for of we have all U.S. one question It seems actually should already and limited Good of the morning of kind have consolidation my was happening kind my Anthony these of smaller in supply taking is environment and It like and most I similar you in in -- any the Thanks. answered, question. were with chain capital industries picture questions for really Mitch. and do but seen easing business if recently. issues wondering fragmented bigger most something I competitive if you expect brick-and-mortar the guys legacy

Mitch Fadel

errands, -- competitor -- much the one in is Yes, e-com brick-and-mortar this there competition, Mitch. Tim, the and either you environment. there's obvious -- is as is public not near us There the Rent-A-Center other business as or virtual emphasized in

we're growing. like stores. competition So, some grown, it's not opening We're has

you open know We're next growing year. only will stores we about As the stores. ones

down Our regional on not competitors growth there. stores side the shutting and we're seeing any real

so I be here growing. there. is small you ones, some be us to So, small that -- do be think, for think Look one competitor and we're acquisitions there some probably anyhow, only ones, there'll not all opportunities know, large the There'll ones material. there'll honestly, I

here certainly side be the probably EBITDA they'll that or small You them, can pretty business. of but I there, in of think but million be few some they'll dollars a add of

for talking So, I or Maureen think and our allocation the stuff great M&A share about. when -- using was the that M&A, balance sheet repurchases you think capital and about

is probably the the be more they're Acima but like opportunities on I in pretty verticals up world side, think going side are other Rent-A-Center do payments on than small. it the and business We'll on to that the Rent-A-Center. the

Tim Vierengel

I It's understand. thanks. much the not M&A Yes, just activity, so

high by, been digits to months say, have almost guys You XX going outperforming for single now. I'm

that's of us -- sustainable how years maybe -- Can number I number much five that gauge Is store is. in the my remind industry to thinking in I trying just Am number have old? the head a of by independents. maybe that you now? was or XX% I So, that run doors smaller you're

Mitch Fadel

-- it's say and You to off. XX XX. know, I'd that you're not far It's between

Tim Vierengel

answering my all right, Thank much right. All so questions. Okay. for you

Mitch Fadel

Thanks, Tim.

Operator

from with Morgan. JP Your question comes next Casella Carla

Carla Casella

on quarter. pre-hired two in labor levels? you sounds It still fully the with and third staffed Are you cost fourth? ones But labor costs are like you expecting front. here. are are I'm hiring you wondering, comfortable quick just you how labor -- in One the through Hi,

Mitch Fadel

There Yes. morning, we going hiring well. on. as because up say always I'd in have There's Good and third quarter caught unfortunately turnover is into October. the we Carla. still

forward October, of would kind and So, good -- going hire, to end the I then late -- was and a pretty we of of October we shape quarter it's by need third the we're people catch-up. in the but into of third normal more say darn number

Carla Casella

just, patterns to you times, sooner mentioned, expected. great. as few a we normal Okay, And then than returned you more

contracts As you retail or side, uptick kind change in you length partners normal. see you anything on traditional customers? to the any your Like for of side that, for to the the average you Rent-A-Center any the or either of there on or customers are way or are changing Acima in return of as have seeing any you unusual do see the or change compete terms the we

Mitch Fadel

but in standpoint, our talking our business it news credit money, morning. tightens, funnel. been us, on if is good that as demand a pushes, get actually demand about as this then, the the above more from certainly No, credit tighter pushes But impacts will, in we've as payments, you as tightens it people

our customers, their options they more can't so were payment And more as proliferation see add get lot call where about and we benefits to a retail I that options. those for retail the Acima easier in business So, absolutely. Jason to you compete we now near from hearing those, LTL but turndowns turndowns space of and say people on actually, pay want their prime as don't that I seeing of that space the makes add overall, from the partners, those store that customers they prime it talk as mentioned to think do in more the there's it we're more doesn't really that attention need need do customer. what start option partners this later with and side, the we it for they easy, buy But with and to same don't just to they and

Carla Casella

you. thank Great,

Mitch Fadel

Carla. Thanks,

Operator

closing I conference to Mitch turn for remarks. will the now over Fadel

Mitch Fadel

interesting to in a normalized where everyone midpoint year chain. you your interest today to time. got be an had we to to we at when Well, the a are been year finish we Overall, quarter, standpoint you the like about thank and acquisition year delighted lumpiness $X. supply we a an an for go third we'd Appreciate off start operator, guidance range of with heck our back little you, your so the that this the in strong, some be of and beginning It's We and thank far, a morning. time. It's Acima year heck the closed Acima, need from faster. talked we in a things EPS the the at of after

and long-term for benefit we has that out to mind mind thought is what the in not moving in some the Keep So, fact, a lot picture. environment outlook changed. to quarters our be and over keep in years. a couple higher least next of that's tighter credit just going And at were where so in a but lumpiness than Acima big we we'd things,

to call and have excited. your Thank work. get get anyhow to we'll back we're we'll with let really So, back you you that, another coming everyone. And probably

Operator

participating. for you Thank

time. You may at this disconnect