RCII - Earnings call transcript Q1 2019

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Operator

Good morning, and thank you for holding. Welcome to Rent-A-Center's first quarter earnings conference call.

As a reminder, this conference is being recorded Tuesday May 07, 2019.

Your speakers today are Mr. Mitch Fadel, Chief Executive Officer of Rent-A-Center; Maureen Short, Chief Financial Officer; and Robert Kiley, Director of Finance. to call like to now would turn over the Mr. I Kiley. ahead, sir. go Please

Robert Kiley

Thank thank everyone, us. morning, you, Good Marcella. and you joining for

Our webcast, results after our distributed material, Investor.rentacenter.com. including of earnings yesterday, to related on release outlines the our link which at live XXXX. market All operational available the for closed financial a first are quarter and was website

publicly could the issued of are to update any yesterday obligation call reminder, some Rent-A-Center over the actual that forward-looking These now company's many which statements. a release as on described well expectations. I'd call factors the statements differ As to in Mitch. this are or revise to to as subject SEC statements, earnings are turn factors our materially cause in to results our filings. provided from no forward-looking like undertakes

Mitch Fadel

Thank us. you, everyone. for you Rob, good and Thank joining morning

to the resolution will on with Vintage shareholders. undivided and of and our focused the I April Under strategic and pleased our sole our on further affiliates Riley. proceeds we're turning million, $XX performance, of we approximately financial executing paid million Capital. operational attention growing we or before our will Before Vintage for with Rent-A-Center litigation enhancing to May of our merger tax. all value with the look to B. the our cash XX, receive approximately the Overall, XXXX. reported And and of after to Rent-A-Center retain million of outcome settlement, fees and pretax we a and business of the of plan XXnd, payment forward $XX.X after other be status $XX the terms get costs, agreement and address of On to Capital in want termination litigation,

minutes. in is annual few And more talk evidenced guidance Our the increases our plan, raising us just working about as guidance, well. by a will Maureen

presentation. the to on Moving

We webcast. be shown providing on the will the to presentation, a voiceover

the If section it our to webcast, website. on Relations Investor view found be you're of unable the can also

on to pillars goal with The strategic update. customer strategic on moving underlying So positive of plan that improving X experience. focuses very the key the XXXX

see on results, bottom materialize our line performance continue or the in to customer revenues, satisfaction in in whether strategies our our We surveys.

Our markets will the mortar and and execution cost be continue the store proposition operating to a improving and focus for as brick our means on franchising executing stabilizing and customers in footprint. optimization, underperforming of of results value our enhancing

headwinds faced Our been first quarter operational we results have over past last the largely the addressed year and show of resolved months. that many XX

result, our a customer go the geared As the experience. be will improving business growing forward and simultaneously towards strategies

we've more the our share of As with this results morning, we and optimization this cost progress presentation seen about very I'm through Starting fine to what we're some the quarter. past strategy. doing excited

As needed in initiatives now rationalization you're of we're those rate aware, well we benefiting early cost the XXXX, began run from implementing initiatives. full some and

growing the improved order staffing through some service demand enhancing same these savings to investing the at time, of store savings on identified first overhead annualized year, other store of a during now We run $XXX basis further million. Additionally expenses. level by the needs customer meet levels rate incremental we're in customers. our of excess experience efficiencies At we in savings of in the quarter this the project from and

belief traffic store areas. that the and in agreements. more we're online customers seamless core Turning investing our experience reinforced the in infrastructure improved customer results web driven we're investments enhanced for These technology investments. value creating together proposition web have right increases a shopping to feedback These pillar, with through online positive our

our virtual NOW quarter software Flash operating solutions. new first test that Finance, the and business, we Additionally, call we in in supporting our hybrid Acceptance launched unmanned

low-volume convert selectively to potentially us unmanned allows significant into staff resulting enhancement virtual labor locations this in savings. stores, Now,

be in stages, growth advantage us Acceptance the the kiosk position has we're feel opportunities even Flash new our marketplace to to available the great and the potential an Finance platform of While put we better retail more early NOW competitive take make scalable, in test in the in space.

continuing on we're XX over the end, And area. franchising. to quarter, first Finally, this XXX the we we Baltimore And stores in over refranchised in refranchised XX locations. focus past the the months,

avenue Looking for our store and performance refranchising certain markets across stabilize continues our be a strategy ahead, to of opportunistically. remain footprint improve us committed we store Franchising to to markets. great

Now looking the X. at the graphs bottom of Slide on

X.X% quarter, comp year sales increased or on two a X.X% stack same-store basis. for consolidated Our the

see, $XXX saving was as by which end addition, result our quarter, around the the again at our past made turn fueled the the a value EBITDA cost initiatives can In is has you million our of year substantial of trailing customer business year. started over proposition first last and enhanced XX-month we

the segment. changes, consider by Driven a turned in Now by really our value easy than increase execution our benefit that money looking of we the more comp quarter. you last half first own X.X% of Page sales core saw when X second we principally and this comp proposition quite And more driven the having better of the to customers collect ahead same-store is core now impressive. year, the on is expected the don't have in on just

have should driven last returns caused tax quarter the and we our of but portfolio rates, basis finished negative we returns, the in overall, product that quarter, didn't both in as the the any expectations. trended payouts made payouts impact delay lower mention higher retention comp changes also in a result segment were the year, on in a customer some shifting core higher satisfaction. our Deliveries first Additionally, customer the line and X.X% within than is portfolio metric growth same-store the with higher have the that's from same-store and this year, brief for delay. And I before. indicator metric at the quarter leading we a of year key to reason about so went year great a This It's and is in full how talked a guidance. year into than a X.X% expectations. X.X%, before. year the higher aspects. And for the experience quarter a good a than last future last higher We've ended quarter of year our year-over-year, lot approximately X% and raising roughly ahead with XXXX last about compares sales

were that. And last a the track, around at first delivery web four Finally, web done see job Slide we are get years, pretty impressive X, per four to saving in customer proud years. by pretty of bottom rationalization. our store looking year-over-year, at the web per new were Adjusted so XX% that And speaking to in in both impressive EBITDA team was and it's and can initiatives store quarter hand which level traffic you customer customer and than generated quarter the corner, it's highest been XXXX, similar of customer our of higher in agreements It's four you're primarily Equally orders, the the drivers, results. driven up significant saw our drivers. million the increases if has $XX first highest the average bottom the store years, cost of our quarter. we're right the end and line count in the

NOW. on to moving Acceptance Now,

behind And I optimization to growth can on opportunities was than words, to enhancements, cost basis the to litigation with mentioned XX.X% Invoice and ago, moment ended points strong although litigation for the our on on higher similar due in merger XX%, now software lower million was us. as first segment. our is these year In in we results next drove trajectory. quarter is next last financial portfolio creating take investing projections our our $X by And volume the sales While same-store segment, turn the giving that and this payouts year. so of outlook than than proposition changes us portfolio we behind this value Maureen now months, climb now progress within a NOW $XX greater store basis point, increase as higher per last what a more Acceptance outlook putting we quarter, can year. the quarter, growth this slightly focus quarter level over expected you on than an that. a to come almost updated I'll Adjusted expected with as to the the XX% this for for our sales to increase comp up the better a the forward and growth of saw segment, over to XX over efforts or bases in Acceptance some to is continued our as pertaining the At in NOW couple last call highlights merger results. same-store now the the look million on EBITDA other a for

Maureen Short

flow. for and Thanks, of balance revised Mitch. for XXXX with will financial before provide an cover guidance Good call and our I'll quarter questions. some morning, the highlights cash then for first I overview close up everyone. opening our the sheet

prior over first class the agreement store and was taken initiatives. XXX which performance last total of and Consolidated the labor advisory million, $XXX same X.X%. margin quarter, settlement, initiatives first $XX.X refranchising by by EBITDA cost was same-store core up in partially $XX than decreased of of implemented. year, and core of U.S. offset diluted was refranchising closures. base, the expected, Adjusted in approximately basis flow identified versus item consolidated stores points expenses total was special was core our last store per The U.S. versus to other XX the was the same fees segment, first driven and and year. X.X%, than EBITDA primarily flat action by items driven last basis store additional at primarily primarily were quarter, litigation primarily the revenues quarter Our of the the X.X%, the by quarter same excluding better approximately million, better $X.XX. related same-store Skip/stolen core special decreased period period of XX%, $XX.X Blair certain and to X.X% cost were $XX.X points sales the in Store period points the was and the locations. period was same sales in forecast. were EBITDA share XXX driven margin million, Free segment over our by cost quarter Net store a was year. losses and last revenue, the Adjusted than core lower profit XXX million the versus due rationalization merger X.X% increase and in charges In legal slightly basis which internal million year higher offset closures savings EBITDA were a count the year. and cash savings by revenues savings increase during termination,

business. of losses same-store flat, closures in the by Acceptance $X.X versus operating of was increase by the NOW over XXX the Acceptance total million million, and year. our up primarily quarter prior EBITDA segment refranchise Store NOW the Skip/stolen increased higher approximately by grew while initiatives than NOW first the EBITDA in the due driven refranchising quarter, our sales basis increased revenues Now the XXX were driven revenue success savings Adjusted the locations expenses other was in decreased EBITDA XXX savings decreased were $XX million, by XX.X%, $XX XX.X% representing and in initiatives. in versus last XXXX. quarter for quarter by Acceptance was points year. Corporate cost revenue, labor with to rationalization an XX% margin and the million turning primarily to due versus year. by approximately of last $X.X expenses XX.X% XX% cost first Adjusted million, In Mexico store first generated was initiatives. $X.X year. store in revenue by of prior franchise XX% points the the same adjusted to primarily period segment, basis first which EBITDA. in

cash the on balance and Moving sheet to flow.

company's at the our available operating was revolver driven cash the ended end performance. million XXXX. quarter Total and of and net at than first in the of of cash account taking including quarter adjusted approximately offset versus $XX inventory credit on XXXX, activities hand quarter by capital, generated cash by purchases balance $XXX layers prior the our on net the reserve. the in $X of quarter, to million, of at our debt sheet Total We $XX The $XXX million into QX million, year, $XX ended by was For ratio times, reduced X.X the end liquidity, lower with committed the debt the at reduced on significantly million X.X the million. end the working higher approximately EBITDA was quarter. of capacity and stronger from operating

deliver months, term debt sheet few next debt a excess our maturities and to by balance facility. refinance and our in the our aggressively utilizing we extend cash intend balance reduce to Over longer

new company is expect give will us more the allocations, The reviewing share allocation flexibility on including We priorities. repurchases. debt repayments dividends, facility debt capital and capital

cash merger to upcoming position at the the agreement, strong we a end refinance the and debt maturities. settlement in of the extend termination quarter our Given position and of the first the from are

you expected at to our expectations to latest look in $X,XXX,XXX,XXX range lays in our is XXXX. As the Total X it presentation, Slide for be consolidated out revenue of $X,XXX,XXX,XXX.

staffed and implemented the be expected positively The XXXX. is and are settlement. flow to incremental a due one-time now the is expected the earnings our initiative. to portfolio, revenue million the $X.XX in by Non-GAAP $XXX the locations. now are on between were is between million year and $X.XX. due locations be will and million, savings be due the previous up from core the quarter earnings, Adjusted diluted planned increased cost the the be primarily from $XXX of higher some benefit settlement the termination due provided million to merger million, $XX previous million expected to first guidance expected and our reduced to $XX the better expected $XX strength due $X.XX item. full GAAP core QX quarter Adjusted the due of While from EPS EBITDA leverage and to results. the first to EBITDA but revenues guidance call, between will as to proceeds performance than from revenue be impact first by of share $XXX from QX and settlement identified than conversion the agreement in million, million to primarily Acceptance initiatives be is on guidance virtual $XX between of the million increased and Free an million our and increase to taxes consolidated our quarter improved expected provided earnings the we projected unchanged savings and million NOW from of in $XX merger cash cost call, to increased termination $XX to special the benefit Cash $XXX $XX per as earnings treated the payouts

with mentioned, As to our XXXX. the company refinance and is active sheet bank group the expect discussions I in during balance

However, today's guidance does not include the impact of refinancing.

quarter does your not first new after XXXX. any Additionally, for the include guidance refranchised transactions you the time. Thank of

call Now we'll turn the over for questions.

Operator

Your first KeyBanc Thomas from Brad comes Instructions] from line question of the [Operator Capital.

Brad Thomas

refranchised ask hoping P&L refranchising us strong the store And just how an Congrats you going. are from efforts. owned. Mitch, Thank it remind economics start the couple conversations as for a impacts I all could wanted And give you. hoping questions think those then versus a store just year you to could on the about was the to was I a here. I just about you to how on one, the update us

Mitch Fadel

sure. Well,

using you brick to, mortar means know, As and franchising we Brad, as underperforming our in and number help market. also the footprint, are one, performance improve the stabilize

investment the to do got store, P&L, they franchisee And EBITDA cases we'll if going about it the there may to that drop. benefit getting So you going even be do But it you're where said, a we're is we're we're if of front that return some asked and royalty than reinvest deals in the so markets if anyhow. our can these certain to we're to to markets be compare In making some the going The only us up some But the to possibly lower help on When down than money have you in impacts to the the it there. only EBITDA's doing to better financially. be going profit opportunistically what the it. might able increase front right forward, up be us. I do footprint, stabilize can like for store. money and underperforming

front or through refranchising, that, the up on forward, are that our trouble amount about that numbers one either our because benefit them us numbers XX the X other, on got, we're EBITDA down can returns. that us way to that in the to doing don't us but the you EBITDA help increased -- forward know, we the fact work So for not return if or by I times reinvest if times do going doesn't it's that's only only going is wouldn't capital think we going you've if I in the when going going the so they numbers

Brad Thomas

And where is about for you've a high goes where in about when a a sense. you've to the headwind group it? XXX-some-odd is forward, just a far, fees proceeds tailwind at the and impact think think gotten or the group you EBITDA rate? just that, because I'm having done going the collectively we of and them that's EBITDA to that is level a the there, about all going down EBITDA that that collectively, EBITDA forward thus Makes as or that your we is stores refranchised higher think from getting run trying

Mitch Fadel

front, positive return up but capital, in on we pretty were on was And making, money things, the it very investment. already was the everything impact -- minimis. relative our EBITDA. the EBITDA in pretty they compared And so to ones pretty just royalty to They there underperforming the EBITDA stores, done. we've forward, been guidance of scheme stream the on in impact return small de of already difference we sold the has the de were received it most a going so were some Those we is minimis are underperforming there, of impact EBITDA stores,

Brad Thomas

I just in the on only that one, comments if guess I just letter for around you've could us guess update? an that Is could FTC. And that helpful. more color FTC great. the at one any squeeze around I point? the Great, And you just, be this from question would your give received

Mitch Fadel

by got a were to in and accounts. release. civil these act. And information investigative the the we the other of are think press FTC the I we transactions rent-to-own And made We've responding important customer is. like it's in transactions relating with from to do of to It the FTC, They're compliance inquiry. we sales requesting purchases to demand the says say companies to believe it us process in

So believe we we'll accordingly, with reply compliance the and but respond FTC act. in transactions our fully were

Brad Thomas

And given Mitch, they're a any your what Just context so rent-to-own tend here. us you maybe looking for year what another transactions could on of sell size to at in to up percentage company? we

Mitch Fadel

have lot even I we me. of front few years. any few I in years. a in don't of haven't back front a No, of It's that -- it in this And couple been mean, last have number the the don't in years. done not stores. goes a I hasn't

to and and here any competitor it haven't there. when few stores stores sold was a that, We did then a we like

it's not So a things. in of very big scheme number the

Operator

question Your the from Joseph next Jefferies. Kyle of comes line from

Kyle Joseph

growth on also the Thanks and the long-term versus congratulations to the volume, I your manned year. taking terms start a the kiosks wanted that seen sense a give improvements mind? in for strong business. business in for of in invoice you've the bit opportunity also and on in to my questions, your a balance that NOW, outlook investments you've unmanned given Acceptance Can made of focus us you in

Mitch Fadel

Kyle. Sure,

with days manned taking of software. days software, hybrid of a able NOW unmanned about said, we're we Acceptance unmanned. As still level are a new the in pretty stage opportunity. we're growth testing such, to with and some next the very some this But manned, Being we're location an still maybe that, competitive the location that I offer to quantifying excited

and do I knows everybody guidance that there's space. growth from We there, growing think significant feel -- to we're in our And in anything haven't white we put there's standpoint. a space significant committed yet

plan us, that that plan couple Over that we're going forth, three our now what and next going that look get can the litigation put the Again, or back like put the it months, we're growth we folks, on so, be to we and together, is years do the behind think to together. what over to plan next of is. stockholders, to our and so think what's

you excited So come I as We're like plan on it. what as it. working growth looks like. of that. quantify We're more we'll to next said, months for couple on And in about that the far that

Kyle Joseph

-- it. decent from is second a and what from moving a high additional parts contributions just part question And I there's moving on some said quarter Obviously, know of for seasonality not. of just, level guess then, bit lot I in us rate? talking with perspective, the parts? seasonality. first And give a can little of Got focusing a cost you a you've G&A identified the first, the XXXX a cuts. cost cuts would But sense you then just EPS the be all given run

Maureen Short

cost quarter first we the run initiatives cost XXXX the implemented the incremental in lot quarter additional in savings G&A over the that the been of And talking are now Kyle, implemented. middle also We've and in have did rate. a towards of in as on initiatives achieved we XXXX implement is call, a mentioned savings we those Yes. that QX. good the

little to Yes, now but seasonality periods forward. essentially may rate quarter, that in be bit about we're tend good there to your the back the -- from a bit we're season, to going earnings. and far at good part, grow quarter, to as first to G&A we're We're a see And is refund we run the expect higher bit a through historical back we most more, then lower given run we're the little lower what typically And seasonality. turnaround, the through a for So tax where turnaround. the see higher But rate revenue, earnings. then as in little forward. continue third we a going revenue question

of seasonality. levels historical to back So

Kyle Joseph

for Maureen, cash you me. the bit but little I can know basis a on going modeling from long-term we outlook forward, you taxes the in one a business the quarter. -- for like forecasted the last rate first gave core than the tax What your looks XXXX, One there? was it. Got lower

Maureen Short

Yes.

tax the XX%. within still be rate, XX% it to For we to expect

throughout the the year. bit pretty So run first up from driven quarter also pretax you The to settlement, went the as a expect saw, taxes rate income. cash higher similar is we by what but little the mainly

Operator

Your next question of James. comes from line the Bugatch Budd from Raymond

Budd Bugatch

Couple NOW. might I of on I you know store color were count us manned questions could the starts on about be a to talking XXXX? a end little Acceptance Finance if what at impact and bit little the you an when bit Mitch, have give about, Can unmanned. the and of Flash more

Mitch Fadel

reason the of I store is much I It's in what be rest a out do from the just few the for count in profit the us forecasted convert here revenue, closures. next you can couple count the the say savings again, year-to-date couple working we get the at Flash. the as test. a year. the a lower for test. count, revenue's as what that to course, pretty end The in model year part you year testing less expanding the next for little stores coming what's forecasting to the I down, don't with the We're some to. with be the of have of growth. into testing it months but well, only of Flash We're couple store store We of the the haven't the and bit of months, process in far this labor. on for going done down phases. model of our in although store growing still of of will see performing more next because expanding years not in We process the little virtual because the to of a really do back for That's we're now. And plan, this of of test the the think we'll we'll expanding the

Budd Bugatch

that you a And How now? to on what's right now? right the average ownership. the volume same-store like? saw I up I does incidence the basis know of term look contracting XX-year that look were invoice XX%. What's increase

Mitch Fadel

I'm the sorry, what? what's

Budd Bugatch

average term agreements term? the length the the What's of for on now What's of the --

Mitch Fadel

NOW vary on few product. coming XX was XX core which shortened now XX% the we under it's The the that is term. is probably about between really about the the business has way. average really and the months, returns the it term business, in of average a really so running But that XX right reduced out Acceptance a half positive increased business now And so XX what we've in returns, months, That's so years depending are back ago, ownership. impacted of in very

Budd Bugatch

incidence what's XX And the of days? the What's terrific. returns incidence day there? If of XX were under XX%, that's

Mitch Fadel

range. somewhere the It's probably doing then and then XX% them, a it's few probably third rest in agreement. it are later in and that one of returns in I the have range, of of But the me. a customers one about that in the don't third EPO in losses. And front few the

Budd Bugatch

statistics? And the and to core rent's was we inventory tell up on Inventory average we us portfolio in X about we when you kind calculated, how up How per see X%, -- forward? X.X%. the about up think I you. think model that the about those store, of do Got going as about about XX%. interested Can actually

Mitch Fadel

the a monthly are of snapshot all in the rent I up mean, about on be think total portfolio right whereas the on the top of I portfolio combined, going of of those X.X%, kind is of each inventory The line. X%, never end other variety reasons. they're for at agreements up the the the inventory being a quarter to value left. is Well,

on never of was on inventory the based number? all that. on number. are going the match those say the and So balance I'd and then sheet the to X%. the they're significantly what product rent third perfectly in And X.X% age same the It's

Budd Bugatch

the the than portfolio about the rent the calculate you be Is which you would if think about… that that inventory to it's better it? indicate up on above should about store, points think gross per sale store Well, growth. average would somewhere X,XXX the How comp inventory on rent, basis way

Mitch Fadel

would being portfolio about up way going sales think neighborhood is comp I the No. same-store the think of in forward. the to core the in X.X%

Mexico, portfolio comp. a sized are to the year are portfolios certainly NOW in but than decent in smaller Acceptance compared those is Acceptance contributor on the higher overall X.X% before. contributors, where NOW the Now, Those

think -- about think the I same-store is how portfolio it's So I sales.

age with inventory so ago the did lot than ownership far more we stores again, As more got newer and happening our proposition. a year older have when on there's a as fact a it's value was ago. in the have different, higher because base year that comparing rent, product you than to much that the we've the customer is your it based going merchandise to on new a balance of value merchandise on sheet, the you're newer the merchandise in When changes like

the those I so So in I to try of because have many the product. X variables together. age never you get wouldn't put

Budd Bugatch

me. Okay, that. I for understand And last

the charge there? Maureen, on be if think We that will about a would thought done? special the that you you as a see refinancing. item. What's talk, Just When do process

Maureen Short

Yes.

and in here and that sheet debt months to balance into cash excess aggressively roll plan few delever the we the So the next refinance balance. flow

been or one-time As far there the expenses our with the associated none one-time be plan. will fees of refinancing. likely that of into items associated the But are forecasted and refinancing, that's fees as

Budd Bugatch

you'll think end by you the the QX? of refinancing get done Do

Maureen Short

and would the summer or a It as a the if towards between goes few the should end planned. say after I of month weeks that. so QX of everything end or be

Operator

Janney. John question from from of Rowan the comes line next Your

John Rowan

Just what the calling of you cost. are one-time size the a mean, notes? getting it and new I Are into notes, and notes refinancing a could back the two go and trying to up rid refinancing talking And look we about figure or notes up, are I into to out facility can I'm callable? but revolving to refinancing. the be

Maureen Short

they're are notes callable date, the XXth May the at The is par. callable. both I of believe both After

to plan do the the any company allocation refinancing. determined longer-term appropriate that We the the changes contemplate the investments going have be us have capital that finalized liquidity debt to the a -- establish priority to may able around business also facility not or we and will make yet in forward. capital provide But decisions

John Rowan

$XX your It talking trying to year-over-year my say, million up, I'm because going And of foot the just in $XX Does have trying about maybe you cash flow XQ just in make insinuate gain size to to quarter with to to will make settlement. cash about that number be XXXX? that you're sure. just I'm I trying the free I'm for the that from what sure pay, did DTL largely the make Okay. taxes guidance. then to model down million like just just sure. correct. in seems

Maureen Short

the I we related piece but that up, settlement. $XX But would is guidance of did by most that have to the raise second cash full year. quarter to look the tax flow for million the of yes, impact

Mitch Fadel

The -- cash tax

John Rowan

through though, DTL expect to the year? the you down, Okay. trend But would

Maureen Short

of deferred on our Partially was follow impact tax But afterwards the based up yes, part the because to pretax John, of income talk through that impact. we can guidance. increasing

Operator

from line question of John Your comes Baugh Stifel. next the from

John Baugh

in the wondered me second. You've a about roughly could now the are where and the been model stores? we on growing. of settling I we if there? tell you you're you're reducing talk business core What's Can staffing for

Mitch Fadel

back let clarify Glad gone used to model staffing investing say When question, in part-timers, on vacancies got too. it. model necessarily Yes. When that, gone of costs, some focused filling Good The a so focused what I rid adding to rid and part-time we've use. we're we just added to to We've we're go I Not John. say model. of really adding, back me full-time faster. we've on we've staffing -- and the labor, got back. that more is well,

now instance, in at XXX For there faster. point faster our are core we're were vacancies on stores, X,XXX resource much the we're those based year averaging XXX we're help the vacancies in And a when so so them filling or turnover you because time in that like look at stores. business much ago any more with -- we of human the folks, XXX filling

a vacancy. be than have to actually the helping a closer we rather model want that our model, thing is to labor more in at in a cost stay business, costing our our because vacancies, when good less to at which So us it's look staffing little we we

of cost forward-looking a staffing staffing into we've add there. some that have that stores vacancies the So we the a we've the But standpoint. it's a job certainly more -- done when turnover, money matter benefiting faster done such as to there's It's therefore a cost and better good we've back filling changed extra again had job model from model faster our we've so not much

John Baugh

on look and you're five about last clearly because three so -- -- I is there's revenue decline. then we could And question core maybe don't years. your stores What franchising, closing my business a thought is know, the out to

Your give be, how? years. to of so reduce I'm out continue course, any as if positive try are where that more franchise of you and onto plan so, will on the what a and that plan I you would taken the sold Thank comp, revenue well margin, it And comps revenue count Is interested be color aggressively the as you. influence are assume, is you five to might if But to a that there positive. could stores franchises in is grow? to such three to or hold and decline stabilize percentage helpful. store

Mitch Fadel

XX% we're in fantastic the so like said, orders up Well, range, growth in we -- visits at seeing being XX%. quarter, web the on with orders, we think the that XX% the in our agreements we're web first up web web

overall. is our over think up web in now XX% business quarter I the

So grow. continues to that

the great in got growth tailwinds So we've core. some

we're like opportunistically shooting underperforming opportunistically, as markets. and underperforming refranchise much better said. to shooting just not a will can I number franchisees really do markets maybe for able help We're being We or do our in for around, turn can as probably better,

stores, our in way our agreements they and franchise when store or Whether and certain than to a more to because they close to level. store -- to a -- of continue maintain markets, level we rather them they maintain tend stores So a of have footprint franchisees open certain if stabilizing can refranchise have count. stores, close of these we sell

stores way we four dropping So it's have overall of or years. the stabilizing way three and over the not footprint a last the

at pretty wouldn't got opportunistically. done being a in same-store I then footprint I we've we sales stores So royalties it store mean, It'll we've and year-over-year than of XXX seen do store stabilizes far And although to year, closures that or the look what going we'll is in revenue revenue. again, is, stores we're footprint so our we from royalties. flat end of to the opportunistically our the down we've footprint. going stabilize we're the the and coming help do, way out the coming revenue revenue those. XXX some keeping pretty think pretty And that rather at anyhow. We stabilize, the much some to offset any down underperforming we've because keep going just or can much be where court, down stores got XXX franchising for the markets. even forecast do we And and sales with closures the franchise in got refranchised, so up are we're making the Plus I got because

John Baugh

are be probably customers, you ANow. left. talk remained color And vibrant. what a a don't Okay. strong? few but seemed what there? verticals want Any about Thank obviously talk individual But quick fairly Or Could then you. you about question retailers so to to

Mitch Fadel

the a some because space the that. of yeah, in just enough now volume's in furniture manned to stores -- primarily high the and say we've I'd larger been right Yes. model, in the furniture we're primarily do

been vertical. well. the furniture business a has great So doing It's It's vibrant. been

our can You that numbers well. in as tell

going software. that us verticals like there's auto. are business there's so I forth. people eyeglass other that there, we're into think appliance And electronics there's a in to business we're lot obviously of now in, do, business more unmanned to do, there's There's auto that out verticals not for and some get to but to have the business

furniture, lot our positive, NOW. far reinvigorated furniture So growth as to it's us and been plan pretty together out business the verticals for it's of But into so there's Acceptance obviously in much get very a for there. been put we

John Baugh

Just a curious furniture stable, in shrinking? strong count door what's comp such driving growing, your there. Is

Mitch Fadel

release, The in little is down store count, as the a you see bit. press

Of grow stores through review have strategic so is you closing. been the we some trying to all it, course, haven't underperforming process,

So the count's down. store

all underperforming on the comp overall the from focusing revenue some strategic of we've go in have process course, to sales revenue far not because left is an and the really review the [indiscernible] Of in headwind from in XXXX, is but revenue, that and growth By as litigation, had overall then you not closure. same-store where back still comp as standpoint. we year-over-year, the

back that turning together. we're Flash the with that put now other on plan a go forecast way you Finance months. And software, our up the then to couple the So and of to corner, next we'll plus growth over with come start to see that

Operator

from line Capital Markets. comes Anthony question of from next Loop the Chukumba Your

Anthony Chukumba

If question the better. skips the those know Acceptance is Is quarter there might of stolens in and up I concern also are that and well. my business comps They on increasing even both be were obviously So stolens. think last is up NOW. some and decisions? your credit that the first in at expense recall they are I are But core getting correctly, as skips your concern and there any any increasing? suboptimal portfolio's of increases I

Mitch Fadel

were we're think it. be. the concerned within end web the with and as at we'd range. a higher of a of X% at It's It's on something year X%, end. to web, end be be. risky like more it's in on we collections first more of No. the we that's no, customer. being of quarter. so at more range top within on range to end X.X% out Last between in we to of we'd end with where quarter, not we not certainly on going think first had loss higher lower closely. -- the watch not end our always our This it's We higher of our And between be range than skip/stolen slightly X.X%. surprising surprising We've year range. want agreements to the at and high the the But the the we'd and it's closely. We a X% lot walk-in want growth, But we about always the is losses, core watching We're in I'm of a range. When the losses, about think so be X.X% the X.X% generate of being

years. we're the out actually quarter had in of second answer our So the the at zone is last best to all, four your And not XX% first comfort question. we've

fantastic year at last that X% was Just range.

has So range to And range the The XX%. the X% way about again, been that and that's we within as a calculate range our account has we way losses, for losses. we been XX% NOW X% think Acceptance range. in

end towards year last we but Just higher the were it. a really Acceptance bit NOW on last the the was of year that the first outlier in little it there low again, end of range, was good. was And so quarter

how day, of close. so higher money neither We we But watch So range, are within it. our not our last year, the but credit comfort We'll our range, higher we're out those there. of and in case were our it collecting in watch zone so closely about no, forth. than concerned every both we're

Anthony Chukumba

wondering, it, new was what primary Finance. Finance? or just really between your question, talked second and existing then I software, you the that's software, helpful. sort And unmanned your improvements my differences of or Flash I your about new software Got Flash are guess

Mitch Fadel

our Flash to can or really, use it, it's our core we The employee our through Finance be assistance, five assisted current a because very just without employee get question. software biggest in assistance. built business. whereas difference our it like get steps, or associate employee can Good is customer through to done A easily, be six takes sales

by done difference. associate sales directly the person That's and without customer the just not be a biggest employee by can either there, our So be to need or this being assisted.

Operator

Carla from comes of question Casella JP Morgan. from the next line Your

Sarah Manzone

It's Sarah on for Carla.

call. refinancing. of they're tranches up of the talked you that then, level And at par tranche? larger ever before What You about right you is consider a into I think the think both one two rolling trading so? leverage do guys do you would

Maureen Short

Yes.

coming we'll coming about So in as leverage that with of and policies things ratios, different target leverage decisions allocation color number a refinancing, think as nature. we the through items. capital more And weeks be ratios the back around finalize we and target we're talking the of

Sarah Manzone

and repeat just is cash what you timing termination can of then, portion the the And fee? the Okay.

Maureen Short

tax a The $XX Netting million. $XX.X $XX fees million. was million after of was of termination and fee pretax proceeds against payment of some proceeds

Sarah Manzone

Great, thanks. Okay.

Mitch Fadel

A on Timing Inc. VP Executive is or Short, & before CFO - Rent-A-Center, May XXth. [XX] - Right. Maureen

Operator

at questions further are this time. for to the Mitch There no closing comments. will over I now Fadel turn call

Mitch Fadel

working report doing put thank morning. we'll hard time for for your plan. kind the And guidance. We'll everyone, up to to Thanks keep you, for this just morning. all our time this your and everyone, having results to shareholders, we work, of your support. showing good hard numbers. back glad are fun It's And enjoy we and thank it's Well, numbers We reporting we're in our and and your board, working raise these on coworkers, it. great and And our fun, good go stakeholders. our

Operator

call. conference today's concludes This

disconnect. may You now

Upbound (UPBD) 8 May 192019 Q1 Earnings call transcript