Rent-A-Center Inc (NASDAQ:RCII) shares are plummeting after the company reported worse-than-expected earnings yesterday after the close. Rent-A-Center, famous for its model of allowing customers to pay for expensive furniture and electronics, cited increased shipping costs and inflation as headwinds.
Shares opened lower more than 30% this morning at $24.13 a share. However, since the open, the stock has moved higher more than 15%, bringing it back above $28 a share. This follows the trend of the overall market, which also opened lower but moved higher throughout the session.
Analysts on Wall Street were expecting revenue of $1.2 billion. Instead, Rent-A-Center reported $1.17, and missed on EPS as well with $1.08 a share compared to the estimated $1.61.
“In the fourth quarter, the combined effect of significantly reduced government pandemic relief, decades-high rates of inflation, and supply-chain disruptions impacted our target customers’ ability to access and afford durable goods, which negatively impacted our results,” said Mitch Fadel, Rent-A-Center chief executive, in a statement.
Rent-A-Center’s stock is still more than 50% off its highs from last September. As more people built homes and remodeled throughout the pandemic, demand for Rent-A-Center’s products rose. This led the stock to run all way from around $12 to $64 in a year, good for a 400% return.
