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Likely Coronavirus Impact on Rent-A-Center's (RCII) Q1 Earnings
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Rent-A-Center, Inc. is scheduled to report first-quarter 2020 numbers on May 6, after market close. The company has a trailing four-quarter positive earnings surprise of 24.9%, on average.
The Zacks Consensus Estimate for first-quarter earnings is pegged at 61 cents, which suggests growth of 3.4% from the year-ago quarter. However, the consensus mark has moved down by a penny over the past seven days. Moreover, the consensus estimate for quarterly revenues is at $704.3 million, which indicates a 1.1% increase from the year-ago quarter’s tally.
Factors to Note
Last month, management informed that most of the Rent-A-Center stores are open to provide support to customers amid the coronavirus crisis. Although the pandemic impacted the company’s performance in March with a 5% revenue decline year over year, favorable trends at the beginning of first-quarter 2020 drove revenues for January and February by 4% year over year. The company’s e-commerce transaction flow more than doubled. In addition, it has been cutting down on operating costs and monitoring all non-essential operating expenses.
Robust initiatives such as ‘Acceptance Now’ business model, cost containment and savings on interest expenses are likely to have driven the company’s performance in the to-be-reported quarter.
However, softness in the Rent-A-Center Business unit for a while now has been a concern. The division has been facing the brunt of refranchising efforts and continued store base rationalization. This is likely to have marred the company’s top-line performance in the quarter.
What Our Zacks Model Says
Our proven model does not predict an earnings beat for Rent-A-Center this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Kroger (KR - Free Report) has an Earnings ESP of +11.89% and a Zacks Rank #2.
Casa Systems has an Earnings ESP of +25.00% and a Zacks Rank #3.
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Likely Coronavirus Impact on Rent-A-Center's (RCII) Q1 Earnings
Rent-A-Center, Inc. is scheduled to report first-quarter 2020 numbers on May 6, after market close. The company has a trailing four-quarter positive earnings surprise of 24.9%, on average.
The Zacks Consensus Estimate for first-quarter earnings is pegged at 61 cents, which suggests growth of 3.4% from the year-ago quarter. However, the consensus mark has moved down by a penny over the past seven days. Moreover, the consensus estimate for quarterly revenues is at $704.3 million, which indicates a 1.1% increase from the year-ago quarter’s tally.
Factors to Note
Last month, management informed that most of the Rent-A-Center stores are open to provide support to customers amid the coronavirus crisis. Although the pandemic impacted the company’s performance in March with a 5% revenue decline year over year, favorable trends at the beginning of first-quarter 2020 drove revenues for January and February by 4% year over year. The company’s e-commerce transaction flow more than doubled. In addition, it has been cutting down on operating costs and monitoring all non-essential operating expenses.
Robust initiatives such as ‘Acceptance Now’ business model, cost containment and savings on interest expenses are likely to have driven the company’s performance in the to-be-reported quarter.
However, softness in the Rent-A-Center Business unit for a while now has been a concern. The division has been facing the brunt of refranchising efforts and continued store base rationalization. This is likely to have marred the company’s top-line performance in the quarter.
What Our Zacks Model Says
Our proven model does not predict an earnings beat for Rent-A-Center this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Rent-A-Center, Inc. Price and EPS Surprise
Rent-A-Center, Inc. price-eps-surprise | Rent-A-Center, Inc. Quote
Although Rent-A-Center carries a Zacks Rank #3, its Earnings ESP of -9.59% makes surprise prediction difficult.
Stocks Poised to Beat Earnings Estimates
Here are a few companies you may want to consider, as our model shows that these have the right combination to post an earnings beat:
BJ's Wholesale Club Holdings (BJ - Free Report) has an Earnings ESP of +8.50% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kroger (KR - Free Report) has an Earnings ESP of +11.89% and a Zacks Rank #2.
Casa Systems has an Earnings ESP of +25.00% and a Zacks Rank #3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>