After announcing better than expected profit forecast and a new growth plan, shares of Rent-A-Center soared higher on investor enthusiasm.
The company’s release stated that Rent-A-Center aims to drive growth, improve profitability and deliver enhanced stockholder value into 2018 through a plan focusing on better pricing and an improved digital presence.
Following the release, shares climbed higher more than 5$ to over $10 a share.
For 2018, the company expects its annual earnings to fall between $1.20 to $1.40 per share. This came in a lot higher than analysts’ forecast of 99 cents, according to FactSet.
Rent-A-Center also expects free cash flow to hit $70 million to $90 million in 2018. 2019 free cash flow could reach anywhere from $110 million to $130 million.
Rent-A-Center Chief Executive Mark Speese said in a statement, “We recognize that significant improvement is needed. We are renewing our focus on what made Rent-A-Center an industry leader — starting with enhancing the value proposition of our offerings to increase customer satisfaction and enable higher rates of ownership.”
Speese had been Rent-A-Center’s interim chief executive and according to a filing with the Securities and Exchange Commission, would be taking on the position full time.
Rent-A-Center shares are still down over 30% in the past year despite the gains on Monday.
Disclaimer: We have no position in Rent-A-Center Inc. (NASDAQ: RCII) and have not been compensated for this article.