Rent-A-Center, Inc. RCII posted sturdy third-quarter 2020 results, wherein both the top and bottom lines beat the Zacks Consensus Estimate and grew year over year. Notably, this marked the company’s fourth-straight earnings beat and fifth-consecutive revenue surprise. Better-than-expected performance, prompted management to raise view for 2020.Quarterly results were driven by the company’s efforts to address challenges tied to the pandemic. The company witnessed strong demand for home-related goods and continues to see positive trends without any further stimulus gains. It has also been making digital investments, and is on track to widen its target-customer demographic and customer retention. Rent-A-Center has launched a digital initiative across the Preferred Lease brand and is focused to accelerate mobile and web strategy. Management remains on track to end 2020 on a solid note, given the healthy lease portfolios as well as robust underlying trends across virtual and omni-channel businesses.Over the past three months, this rent-to-own operator has seen its shares increase 10.7% against the industry’s 11% decline.Q3 in DetailRent-A-Center posted adjusted earnings of $1.04 a share that outshone the Zacks Consensus Estimate of $1.01. Moreover, the bottom line rose significantly from 47 cents earned in the year-ago quarter.RentACenter, Inc. Price, Consensus and EPS Surprise RentACenter, Inc. price-consensus-eps-surprise-chart | RentACenter, Inc. QuoteTotal revenues of $712 million came ahead of the Zacks Consensus Estimate of $703 million and grew 9.6% year over year. This was mainly driven by same-store sales growth in the Rent-A-Center Business segment and higher Preferred Lease revenues.Meanwhile, adjusted EBITDA came in at $92.1 million, up 62.7% from the year-ago period. We note that adjusted EBITDA margin expanded 420 basis points to 12.9%.Segment PerformanceRevenues at the Rent-A-Center Business segment rose 8.6% to $474.2 million owing to same store sales revenue growth of 12.9% stemming from a 71% increase in e-commerce sales. As of Sep 30, 2020, the segment had 1,947 company-operated locations. Considering the California refranchising transaction, the Rent-A-Center Business unit has nearly 1,850 company-operated locations.Revenues at Preferred Lease segment grew 9.3% from the prior-year quarter to $201.7 million, mainly buoyed by the virtual retail-partner growth. Moreover, invoice volumes rose 34.4%, driven by virtual retail-partner additions along with organic growth in virtual and staffed locations.Mexico segment’s revenues totaled $12.2 million, up 3.6% on a constant-currency basis. Also, the segment’s same-store sales rose 4.3%. As of Sep 30, the unit had 121 company-operated locations.Finally, Franchising revenues jumped 59.6% to $24 million. This can primarily be attributed to increased store count and higher inventory purchases by franchisees. As of Sep 30, the company had 363 franchise-operated locations. Following the California refranchising transaction, it had roughly 460 franchise operated locations.Other Financial AspectsRent-A-Center ended the reported quarter with cash and cash equivalents of $227.4 million, net senior debt of $190.6 million and stockholders' equity of about $542.3 million. Further, it had an outstanding indebtedness of $198 million at quarter end. The company had $209 million available under its revolving credit facility.Capital expenditures totaled $7.8 million in the quarter. This Zacks Rank #2 (Buy) company generated cash of roughly $296.2 million from operations and free cash flow, including acquisitions and divestitures of $273.3 million during the nine months of 2020.On Jul 22, 2020, the company entered into an asset-purchase agreement to divest its entire 99 Rent-A-Center Business stores in California to an experienced franchisee. The divestiture was consummated on Oct 5, 2020 for cash of nearly $16 million, which consists of $1 million paid for related franchise fees.2020 OutlookFollowing a sturdy quarter, management raised view for 2020, reflecting the refranchising of 99 California Rent-A-Center locations. Revenues are now projected in the bracket of $2.795-$2.825 billion, versus the earlier guided range of $2.780-$2.830 billion provided on Sep 21.Further, adjusted EBITDA is now forecast between $308 and $323 million, compared to the prior range of $295-$320 million. Meanwhile, free cash flow is predicted in the band of $200-$215 million versus $155-$180 million guided earlier. Adjusted earnings are now envisioned between $3.35 and $3.50 per share, up from the prior projection of $3.15-$3.45. The renewed guidance suggests year-over-year growth of 49-56% from $2.24 earned in 2019. The Zacks Consensus Estimate for 2020 earnings is currently pegged at $3.35.For the Preferred Lease segment, revenues are likely to fall in the band of $812-$822 million and adjusted EBITDA in the range of $66-$71 million. For the Rent-A-Center Business segment, management anticipates revenues of $1.825-$1.840 billion and adjusted EBITDA of $352-$362 million.Don’t Miss These Solid BetsDeckers DECK has an expected long-term earnings-growth rate of 17.7% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.Caleres CAL has delivered an earnings surprise of 21% in the last four quarters, on average. The company currently has a Zacks Rank of 1.Crocs CROX, a Zacks Rank #2 stock, which has delivered an earnings surprise of 191.7% in the last four quarters, on average.Looking for Stocks with Skyrocketing Upside?Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.See the pot stocks we're targeting >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report RentACenter, Inc. (RCII): Free Stock Analysis Report Deckers Outdoor Corporation (DECK): Free Stock Analysis Report Crocs, Inc. (CROX): Free Stock Analysis Report Caleres, Inc. (CAL): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research