Rent-A-Center beats, stock shoots up as investors look past accusations
The company's rosy earnings report coincided with a complaint lodged by Washington's attorney general, who accused the company of harassing and threatening customers while trying to collect payments from them. He also alleged the company did disclose exorbitant prices customers could pay if payments continued until a product was purchased. The company denied any wrongdoing and promised to vigorously defend against the state's attempt to declare both its contracts and collections illegal.
Revenue at Rent-A-Center fell by more than six percent to $679.6 million. Excluding a one-time litigation credit, the company reported earning 61 cents per share. The company attributed the revenue decline to store consolidation.
Rent to own stores do well in a down economy, profiting from customers' inability to obtain credit or to have enough cash on hand to purchase a variety of items from televisions to beds.