Rent-to-own company Rent-A-Center (RAC) attested to this, lowering its third-quarter guidance on Sept. 27. Mitch Fadel, CEO of the Plano, Texas-based firm, cited economic conditions – including inflation – for RAC adjusting its predictions. These impacted both retail traffic and customer payment behavior, he added.
RAC's revision of its Q3 predictions came amid President Joe Biden touting the strong economic strides during the first two years of his presidency, which he bragged about in a tweet. However, the president's claim seems far from reality as U.S. consumers continue to bear the brunt of inflation – to the point that they can no longer afford rent-to-own services.
"External economic conditions have continued to deteriorate over the past few months," explained Fadel. "This has affected both retail traffic and customer payment behavior, so we are updating third quarter guidance to reflect the impact of those trends on our business."
With the adjusted guidance, RAC now expects a maximum revenue between $1 billion and $1.02 billion for the third quarter – as well as adjusted earnings per share between $0.85 and $0.95. Previously, the company expected a maximum revenue between $1 billion and $1.06 billion with adjusted earnings per share between $1.05 and $1.25.
Despite this, Fadel expressed confidence in RAC's long-term resiliency, even during economic downturns.
ZeroHedge's Tyler Durden wrote: "Those same lower-middle consumers who can't even afford to rent stuff due to soaring prices, are about to lose their jobs too as the Fed and the puppet Biden regime push the U.S. economy in all-out collapse. "(Related: Billionaire fund manager warns of major economic collapse, says he sees 'cracks everywhere' in Biden’s economy.)
American consumers continue to hit the recession brick wall as stocks are getting crushed by the bullwhip effect – sending inventories soaring at well-known sports apparel brands Nike and Under Armour.
Nike Inc. shares fell the most in more than 20 years after a glut of unwanted merchandise eroded the sportswear giant's profitability. The company inventories also surged 65 percent in the fiscal first quarter that ended Aug. 31, and resulting markdowns caused gross margin to miss Wall Street's expectations. It also cited higher freight costs and foreign-exchange effects in its earnings report, released late Thursday, and downgraded its outlook for the full year.
Nike's fiscal first-quarter performance was actually in line with estimates, though its guidance for the upcoming holiday quarter seemed to worry investors. However, rising freight costs and higher markdowns ate into profits with its gross margin falling 220 basis points to 44.3 percent and its net income declining 22 percent to $1.47 billion. Like much of the retail industry, Nike also reported bloated inventory levels with inventories up 44 percent to $9.7 billion.
Elevated inventories are "driving intense margin pressure," Wedbush Securities analyst Tom Nikic stated in a research note.
Like Nike, Under Armour reported weak revenue growth in its most recent quarter, rising costs from freight and increased markdowns for the year. It also slashed its profit guidance for the year, calling for adjusted earnings per share of $0.47-$0.53, down from a prior range of $0.63-$0.68.
Under Armour's inventory rose just eight percent, but Wall Street may lower its estimates following the Nike update.
Visit Bubble.news for more news related to the ever-soaring prices of products and services.
Watch the below video where a billionaire talks about how Biden's economy is on the verge of destruction.
This video is from the NewsClips channel on Brighteon.com.