The furniture and equipment rental firm on Tuesday blamed a dreadful transition to a new cash-register system for a sudden drop in sales and profit.
Investors crushed the company's stock (RCII), driving shares down 34.7% in early trading to $8.41.
In an unusually early commentary on its third-quarter earnings performance, Rent-A-Center said that sales at stores open at least a year fell about 12%, compared to a year earlier.
“Following the implementation of our new point-of-sale system, we experienced system performance issues and outages that resulted in a larger than expected negative impact on core sales,” CEO Robert D. Davis said in a statement. "While we expect it to take several quarters to fully recover from the impact to the core portfolio, system performance has improved dramatically and we have started to see early indicators of collections improvement."
The company also said that U.S. gross profit as a percentage of total revenue would be flat for the third quarter.
Rent-A-Center will report third-quarter earnings on Oct. 27. The Plano, Texas-based firm offers rent-to-own deals on electronics, appliances, furniture and other home items.
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.
Resource : http://www.usatoday.com/story/money/2016/10/11/rent-a-center-profit-sales-third-quarter/91889618/
