Rent-A-Center Inc (NASDAQ:RCII) stock was down on Tuesday after the company announced preliminary results for its third quarter of 2016.
Rent-A-Center is expecting same-store sales in the United States to be down 12% when compared to the same time last year. It is also looking for Acceptance Now same-store sales to be flat when compared to the third quarter of 2016.
Rent-A-Center has also noted that Core United States gross profit growth will be flat. It contributes this to a clearance event during its third quarter that offset the benefits from changes in its sourcing model.
Rent-A-Center is expecting its earnings per share for the third quarter of 2016 to be 5 cents. If this holds true, it will be an increase over the losses of 8 cents per share that the company reported in the third quarter of 2015. However, it won’t meet the 39-cent estimate that Wall Street is expecting for this quarter.
“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,” Robert D. Davis, RCII CEO, 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.”
Rent-A-Center notes that these estimates may change before it releases its final results for the third quarter of 2016. It claims that it is possible for the final report to be affected by items that haven’t been discovered yet.
Rent-A-Center will release its earnings report for the third quarter of 2016 on Oct. 26, 2016.
RCII stock was down 29% as of Tuesday morning.