Rent-A-Center Cuts Forecast


Rent-to-own home furniture retailer Rent-A-Center Inc (NASDAQ:RCII) cut its full-year forecast for revenue and profit, saying it expected demand to remain weak, sending its shares down as much as 2 percent in extended trade.

The company also reported a 58 percent drop in second-quarter profit due partly to a rise in operating and restructuring costs.

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The company had earlier this month said its results for the latest quarter would be hurt by weaker demand in the United States as macro-economic pressures weigh.

Stagnant wage growth and rising taxes are forcing consumers to keep a lid on discretionary spending. Rival Pier 1 Imports Inc reported lower-than-expected profit for the quarter ended May 31 and cut its full-year profit outlook last month.

Other specialty retailers such as Elfa shelving systems maker Container Store Group Inc also reported weak second-quarter results this month and reduced its full-year forecast.

Rent-A-Center said it now expects earnings of $2-$2.15 per share on revenue growth of 2.5-4 percent for 2014.

It had previously forecast earnings of $2.30-$2.50 per share on revenue growth of 3-6 percent.

Shares of the company were trading at $23.50. They closed at $23.98 on the Nasdaq on Monday.

(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Joyjeet Das and Anil D'Silva)