Rent-A-Center’s Parent Company Navigates a Tale of Two Businesses

Upbound Group, the parent company of Rent-A-Center, presented a contrasting financial picture in its third-quarter 2025 report. The consolidated entity celebrated a 9.0% revenue surge, reaching $1.2 billion. However, this corporate success starkly contrasts with the ongoing difficulties within the core Rent-A-Center business, raising questions about the stock's surprising resilience in the face of these challenges.

The company's strategic expansion into new segments appears to be a key factor offsetting legacy weaknesses. The Acima segment reported its eighth consecutive quarter of growth, demonstrating strong momentum with an 11.0% increase in merchandise volume and a 10.4% rise in revenue. Even more dynamic is the Brigit financial solutions platform, which saw revenue skyrocket by 40.2%. This explosive growth is primarily fueled by a 26.8% expansion in its base of paying subscribers. These newer, high-growth areas are effectively softening the impact of the troubles in the traditional rent-to-own (RTO) market.

Core Rent-A-Center Segment Faces Significant Headwinds

In direct opposition to the corporate growth, the fundamental Rent-A-Center operation is experiencing a pronounced downturn. The segment's revenue fell sharply by 4.7% to $461.1 million. This decline is attributed to a reduced store count and a smaller portfolio at the start of the quarter. The situation looks even more concerning when examining comparable sales, which dropped by 3.6% year-over-year. A single, faint positive note exists: this rate of decline showed a slight improvement, narrowing by 40 basis points compared to the previous quarter. The segment's adjusted EBITDA also decreased, landing at $74.7 million, down from $79 million in the same period last year.

Management Revises Financial Guidance Downward

The persistent weakness in the core business has compelled Upbound Group to take a more conservative stance on its full-year outlook. The company has officially lowered its forecast for adjusted EBITDA. The new projected range is $500 to $510 million, a reduction from the previously guided range of $515 to $535 million. Similarly, the earnings per share (EPS) forecast has been trimmed. The company now anticipates EPS between $4.05 and $4.15, compared to the earlier expectation of $4.05 to $4.40.

Should investors sell immediately? Or is it worth buying Rent-A-Center?

Key financial revisions include:
* Rent-A-Center Revenue: $461.1 million, reflecting a 4.7% decrease
* Comparable Sales: Down 3.6% year-over-year
* FY 2025 Adjusted EBITDA: Lowered to $500-$510 million
* FY 2025 EPS: Lowered to $4.05-$4.15

Company leadership cited margin pressure within the Acima segment and the continued underperformance of the core Rent-A-Center business as the primary reasons for this guidance cut.

A Paradoxical Stock Performance Defies Gloomy News

Despite the downward revision in key financial metrics, Upbound Group's stock has demonstrated notable fortitude. Over a three-month period, the company's shares advanced by 12%, a period during which its industry peers lost an average of 4.5%. This divergence suggests that investors may be looking beyond the immediate struggles of the legacy business and placing their confidence in the successful strategic pivot towards high-growth segments like Acima and Brigit. The ultimate trajectory for the stock will likely depend on whether the growth from these new ventures can fully and sustainably compensate for the persistent issues in the original Rent-A-Center operations.