Rent-A-Center Inc. on Aug. 7 reported second-quarter earnings that exceeded analysts' expectations and increased its guidance for fiscal 2019 to reflect the impact of completing the refinancing of its credit facility.
For fiscal 2019, Rent-A-Center now expects Non-GAAP diluted earnings per share between $2.05 and $2.40, up from its previous guidance ranging between $1.85 and $2.25. Consolidated revenue for the full year is now expected to be between $2.60 billion and $2.64 billion, compared to its previously estimated range of $2.59 billion to $2.63 billion. The company now anticipates a mid-single digits growth in consolidated same-store sales compared to its previous projection of low to mid-single-digit growth.
Rent-A-Center on Aug. 5 entered new credit agreements with several lenders. JPMorgan Chase Bank NA served as administrative agent for a five-year, $300 million asset-based revolving credit facility and a seven-year $200 million term loan B.
The company borrowed the full $200 million of initial term loans available under the term loan B and $80 million under the asset-based revolving credit facility. The company used the proceeds plus cash on hand to prepay in full and terminate commitments under the company's existing senior credit facility, and clear its outstanding 6.625% notes and 4.75% notes.
Upon completion of the refinancing, the company's outstanding debt is $280 million as of Aug. 5, about $260 million lower than its outstanding debt as of June 30.
The retailer's non-GAAP diluted earnings per share for the quarter ended June 30 rose to 60 cents from 47 cents in the year-ago quarter, beating the mean consensus estimate for normalized EPS of 57 cents, according to data compiled by S&P Global Market Intelligence.
Total revenue for the second quarter, on a consolidated basis, was $655.9 million, driven by a 5.8% increase in consolidated same-store sales year over year. However, the growth was offset by refranchising over 100 locations since the first quarter of 2018 and the closure of certain core U.S. stores, the company said.