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Rent-A-Center operates a network of stores that provide consumer electronics, appliances, computers, and furniture to consumers under rental purchase agreements. In the summer of 2015, the Company began implementing a point of sale (“POS”) system and customer credit program in an attempt to control inventory and increase revenue and profitability. However, the Company’s new POS system was not properly implemented and caused severe harm to Rent-A-Center’s overall operations.
The complaint alleges that during the Class Period Rent-A-Center and certain of its executive officers made false and/or misleading statements and/or failed to disclose the following: (1) that Rent-A-Center could not properly implement its new POS; (2) that the POS was performing extremely poorly, including several instances where the system suffered complete outages; (3) that as a result, the Company’s credit system could not be implemented properly; (4) that the Company could not meet revenue and profitability guidance provided to investors; and (5) that, as such, the Company would need to revise its prior guidance. The complaint further alleges that, as a result of the foregoing, the Company’s statements about its business, operations and prospects were false and misleading and/or lacked a reasonable basis at all relevant times.
On July 27, 2016, Rent-A-Center reported its second quarter 2016 financial and operational results. For the quarter the Company reported diluted earnings per share (“EPS”) of $0.41, and further reported that Core U.S. same store sales had decreased by 6.7% driven by, among other things, “the impact and acceleration of the point of sale system rollout.” Additionally, Rent-A-Center’s Chief Executive Officer (“CEO”) disclosed that “[t]he point of sale implementation negatively impacted Core revenue in the second quarter and reduced our portfolio making it necessary to revise our outlook for the year.” On this news, shares of the Company’s stock declined $2.34 per share, or over 17%, to close on July 28, 2016 at $10.92 per share.
Then, on October 11, 2016, Rent-A-Center reported preliminary third quarter 2016 financial and operational results. Therein, the Company disclosed that it expected to report that Core U.S. same store sales for the third quarter would be down approximately 12% and that diluted EPS for the quarter would be between $0.05 and $0.15. Additionally, Rent-A-Center’s CEO disclosed that, “[f]ollowing the implementation of our new point-of-sale system, we experienced system performance issues and outages that resulted in a larger than expected negative impact on Core sales.” On this news, shares of Rent-A-Center’s stock declined $3.70 per share, or over 28%, to close on October 11, 2016 at $9.18 per share.
If you are a member of the class described above, you may no later than February 21, 2017 move the Court to serve as lead plaintiff of the class, if you so choose.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will will adequatley represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of their choice, or may choose to do nothing and remain an inactive class member.
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