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Upbound (UPBD) Q3 Earnings Top Estimates, Sales Down Y/Y
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Upbound Group, Inc. (UPBD - Free Report) , earlier known as Rent-A-Center, posted its third-quarter 2023 results, wherein the top and bottom lines surpassed the consensus estimate. The company’s revenues and earnings declined year over year.
Shares of this Zacks Rank #3 (Hold) company have increased 15.9% in the year-to-date period compared with the industry’s 6.3% rise.
Q3 in Detail
Upbound posted adjusted earnings of 79 cents a share, surpassing the Zacks Consensus Estimate of earnings of 75 cents per share. However, the bottom line dipped from earnings of 94 cents per share in the year-ago quarter.
Upbound Group, Inc. Price, Consensus and EPS Surprise
Total revenues of $979.1 million came above the consensus estimate of $966 million. The metric fell 4.4% year over year, mainly due to lower rentals and fees, and merchandise sales as well as decline in lease portfolio value.
Adjusted EBITDA was $106 million, down 7.8% from the year-ago period’s level, owing to lower Rent-A-Center segment EBITDA and increased corporate expenses more than offsetting higher Acima’s EBITDA.
Segmental Performance
Revenues at the Rent-A-Center Business segment dipped 4.2% to $453.6 million due to the lower lease portfolio value year over year. Same-store sales were down 4%. E-commerce accounted for 25% of the quarterly revenues compared with 23% in the prior-year period. The segment’s lease portfolio value slipped 2.7% year over year. Segment’s adjusted EBITDA margin was 15%, decreasing 120 basis points from the prior year. As of Sep 30, 2023, the unit had 1,844 locations.
Revenues at the Acima segment (formerly known as the Preferred Lease segment) declined 5.8% from the prior-year quarter’s level to $475.2 million, mainly due to lower rental and fees revenues, and merchandise sales. Also, gross merchandise volume declined 1.4% due to sluggish demand at certain merchant partners. The segment’s adjusted EBITDA margin increased to 15.3% from 12.6% in the year-ago period.
Franchising revenues rose 3% to $30.6 million primarily due to increased inventory purchases per store. As of Sep 30, 2023, Rent-A-Center had 439 franchise-operated locations.
Mexico segment’s revenues totaled $19.6 million, up 3.2% on a constant-currency basis. As of Sep 30, 2023, the unit had 130 company-operated locations.
Other Financial Aspects
Upbound ended the reported quarter with cash and cash equivalents of $105.7 million, net senior debt of $800 million and a stockholders' equity of $597.2 million.
The company repurchased 0.9 million shares in the third quarter and 1.7 million through October 31. UPBD provided cash from operating activities of $219.9 million and free cash flow totaled $183.8 million during the first nine months of 2023.
Outlook
Management revised guidance for 2023. For the year, consolidated revenues are anticipated to be $3.95-$4 billion compared with $3.9-$4 billion projected earlier and $4.2 billion reported in 2022. Adjusted EBITDA is projected to be between $450 million and $460 million versus $440-$465 million anticipated earlier and $453.5 million reported last year.
Upbound envisions adjusted earnings to be in the range of $3.45-$3.55 per share compared with the earlier projection of $3.25-$3.55 per share and earnings of $3.70 per share reported in 2022. The company expects free cash flow to be in the band of $215-$235 million for 2023.
RCL has a trailing four-quarter earnings surprise of 28.3%, on average. The Zacks Consensus Estimate for RCL’s 2023 sales and earnings per share (EPS) indicates increases of 56.8% and 186.1%, respectively, from the year-ago period’s reported levels.
GIII Apparel, a footwear and accessories dealer, sports a Zacks Rank of 1 at present. GIII has a trailing four-quarter earnings surprise of 526.6%, on average.
The Zacks Consensus Estimate for GIII Apparel’s current financial-year sales and EPS suggests growth of 2.4% and 14.7%, respectively, from the year-ago corresponding figures.
lululemon athletica is a yoga-inspired athletic apparel company. LULU carries a Zacks Rank #2 (Buy), at present.
The Zacks Consensus Estimate for lululemon athletica’s current financial-year sales and EPS suggests growth of 18.1% and 20.5%, respectively, from the year-ago corresponding figures. LULU has a trailing four-quarter earnings surprise of 6.8%, on average.
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Upbound (UPBD) Q3 Earnings Top Estimates, Sales Down Y/Y
Upbound Group, Inc. (UPBD - Free Report) , earlier known as Rent-A-Center, posted its third-quarter 2023 results, wherein the top and bottom lines surpassed the consensus estimate. The company’s revenues and earnings declined year over year.
Shares of this Zacks Rank #3 (Hold) company have increased 15.9% in the year-to-date period compared with the industry’s 6.3% rise.
Q3 in Detail
Upbound posted adjusted earnings of 79 cents a share, surpassing the Zacks Consensus Estimate of earnings of 75 cents per share. However, the bottom line dipped from earnings of 94 cents per share in the year-ago quarter.
Upbound Group, Inc. Price, Consensus and EPS Surprise
Upbound Group, Inc. price-consensus-eps-surprise-chart | Upbound Group, Inc. Quote
Total revenues of $979.1 million came above the consensus estimate of $966 million. The metric fell 4.4% year over year, mainly due to lower rentals and fees, and merchandise sales as well as decline in lease portfolio value.
Adjusted EBITDA was $106 million, down 7.8% from the year-ago period’s level, owing to lower Rent-A-Center segment EBITDA and increased corporate expenses more than offsetting higher Acima’s EBITDA.
Segmental Performance
Revenues at the Rent-A-Center Business segment dipped 4.2% to $453.6 million due to the lower lease portfolio value year over year. Same-store sales were down 4%. E-commerce accounted for 25% of the quarterly revenues compared with 23% in the prior-year period. The segment’s lease portfolio value slipped 2.7% year over year. Segment’s adjusted EBITDA margin was 15%, decreasing 120 basis points from the prior year. As of Sep 30, 2023, the unit had 1,844 locations.
Revenues at the Acima segment (formerly known as the Preferred Lease segment) declined 5.8% from the prior-year quarter’s level to $475.2 million, mainly due to lower rental and fees revenues, and merchandise sales. Also, gross merchandise volume declined 1.4% due to sluggish demand at certain merchant partners. The segment’s adjusted EBITDA margin increased to 15.3% from 12.6% in the year-ago period.
Franchising revenues rose 3% to $30.6 million primarily due to increased inventory purchases per store. As of Sep 30, 2023, Rent-A-Center had 439 franchise-operated locations.
Mexico segment’s revenues totaled $19.6 million, up 3.2% on a constant-currency basis. As of Sep 30, 2023, the unit had 130 company-operated locations.
Other Financial Aspects
Upbound ended the reported quarter with cash and cash equivalents of $105.7 million, net senior debt of $800 million and a stockholders' equity of $597.2 million.
The company repurchased 0.9 million shares in the third quarter and 1.7 million through October 31.
UPBD provided cash from operating activities of $219.9 million and free cash flow totaled $183.8 million during the first nine months of 2023.
Outlook
Management revised guidance for 2023. For the year, consolidated revenues are anticipated to be $3.95-$4 billion compared with $3.9-$4 billion projected earlier and $4.2 billion reported in 2022. Adjusted EBITDA is projected to be between $450 million and $460 million versus $440-$465 million anticipated earlier and $453.5 million reported last year.
Upbound envisions adjusted earnings to be in the range of $3.45-$3.55 per share compared with the earlier projection of $3.25-$3.55 per share and earnings of $3.70 per share reported in 2022. The company expects free cash flow to be in the band of $215-$235 million for 2023.
Eye These Consumer Discretionary Picks
Some better-ranked companies are Royal Caribbean (RCL - Free Report) , GIII Apparel Group (GIII - Free Report) and lululemon athletica (LULU - Free Report) .
Royal Caribbean sports a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
RCL has a trailing four-quarter earnings surprise of 28.3%, on average. The Zacks Consensus Estimate for RCL’s 2023 sales and earnings per share (EPS) indicates increases of 56.8% and 186.1%, respectively, from the year-ago period’s reported levels.
GIII Apparel, a footwear and accessories dealer, sports a Zacks Rank of 1 at present. GIII has a trailing four-quarter earnings surprise of 526.6%, on average.
The Zacks Consensus Estimate for GIII Apparel’s current financial-year sales and EPS suggests growth of 2.4% and 14.7%, respectively, from the year-ago corresponding figures.
lululemon athletica is a yoga-inspired athletic apparel company. LULU carries a Zacks Rank #2 (Buy), at present.
The Zacks Consensus Estimate for lululemon athletica’s current financial-year sales and EPS suggests growth of 18.1% and 20.5%, respectively, from the year-ago corresponding figures. LULU has a trailing four-quarter earnings surprise of 6.8%, on average.