Q3 2024 Upbound Group Inc Earnings Call Transcript
Key Points
- Upbound Group Inc (UPBD) reported a strong third quarter with revenue nearly reaching $1.1 billion, adjusted EBITDA of approximately $117 million, and non-GAAP earnings per share of $0.95.
- Acima, a segment of Upbound Group Inc (UPBD), led with a 19% year-over-year revenue increase and a 13% growth in GMV, marking its fourth consecutive quarter of GMV growth.
- Rent-A-Center achieved a 110 basis point improvement in revenue despite closing about 50 stores, and reported a 2.6% same-store sales growth for the third consecutive quarter.
- The company successfully executed a sale of 55 stores in the New York Metro area to an existing franchisee, which is expected to be EBITDA enhancing.
- Upbound Group Inc (UPBD) is on track to meet its full-year guidance, with expectations of achieving low double-digit GMV growth at Acima in the fourth quarter.
- Rent-A-Center experienced a seasonal sequential increase in lease charge-off rates to 4.9%, slightly above earlier expectations due to challenging consumer environments.
- Acima's EBITDA margin decreased to 13.3%, reflecting trade-down dynamics and an increase in lower-margin early purchase activity.
- Consolidated gross margin decreased by 300 basis points year-over-year, with Acima experiencing a 280 basis point decrease.
- The company incurred an estimated $7.5 million in settlement expenses related to outstanding legal matters with the CFPB, New York AG, and Multistate AG.
- The consolidated lease charge-off rate increased by 40 basis points from the prior year period, indicating ongoing challenges in managing credit risk.
Good day, and thank you for standing by. Welcome to the Q3 2024 Upbound Group Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jeff Chesnut, Head of IR. Please go ahead.
Good morning, and thank you all for joining us to discuss the company's performance for the third quarter of 2024. We issued our earnings release this morning before the market opened, and the release and all related materials, including a link to the live webcast are available on our website at investor.upbound.com. On the call today from Upbound Group, we have Mitch Fadel, our CEO; and Fahmi Karam, our CFO. As a reminder, some of the statements provided on this call are forward-looking and are subject to factors that could cause actual results to differ materially and adversely from our expectations. These factors are described in our earnings release as well as in the company's SEC filings. Upbound
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