Upbound Group, Inc. (UPBD) Earnings Call Transcript & Summary

Good morning. Thanks, everyone, for attending. Those who've -- in person, thanks very much for being here, also those on the webcast. My name is Vincent Caintic, I'm a specialty finance analyst. I'm pleased to be welcoming the Rent-A-Center executive management team here. To my immediate right is Maureen Short, CFO; and to her right, Mitch Fadel, CEO. Maybe if we can start off with some recent developments. So first, this morning you had a press release with some pretty nice news on capital return actions. Maybe if we can just talk about that initially.

Sure. So we did put out a press release this morning, announced that we increased our dividend by 10% and that we authorized a share repurchase program of $500 million. Back in August, we announced a $250 million share authorization. And we also announced this morning that we completed it. So given our stock price, we think share repurchases are a great use of capital and look forward to the additional authorization of share repurchases.

Yes, it's pretty impressive. I guess, with the $500 million share repurchase, you increased your dividend 10% as well. And you're still -- so even after all those actions, you have the capacity to grow the business by double digits?

We do. The free cash flow generation of the company is pretty substantial. And so even with those levels of increases in capital allocation, we should have plenty of liquidity and cash flow to fund our growth business of Acima. Our Rent-A-Center business generates a lot of free cash flow. And so we'll fund it through both balance sheet, cash flow, cash on the balance sheet, and yes, are not -- we don't think that, that hurts our growth opportunities.

Yes. We were growth first. So we would -- we would be -- we're growth first and then -- but there is a lot of cash flow, to Maureen's point in our -- the position of our balance sheet, we're able to do -- we're able to grow and return -- do those kind of returns for the shareholders.

And we didn't change our long-term leverage targets as well. We still expect to be at around 1.5x long term.

Okay. Yes, that's great news. Another recent development that we've seen and certainly got a lot of questions about is kind of a regulatory update, and there's been -- from the CFPB and some state AGs, some [ new source ]. So maybe if you could talk about that and any views there.

Sure. We got a letter, what it is, as most everyone knows in our business, we get these things from time to time, regulatory proceedings and so forth being in the financial services type of business. But I think what you're referring to, Vincent, we got a letter at early November and heading into our Q about attorney general, 38 state attorney general investigation. So we reached out to them after we got the letter. Since we filed the Q, we reached out to them to have preliminary discussions with the officials at the lead AG offices. There's like four that are leading the 38. And based on those discussions, it's our understanding the investigation is going to look at business practices in multiple companies in our industry. It's -- I don't know how many, but it's going to include multiple companies. And we also -- so we've learned that through our initial conversations. We also -- there have been no CID, no scheme yet. There's no allegations at this point, but -- so they're looking at the industry and it will include multiple companies. We'll obviously cooperate with them. But it's not -- there's no allegation specific to Acima, so -- at least at this point. So we look forward to cooperating with them and answering the questions about our industry. We're proud of our industry. We're proud of the way we do business, and we'll show them how we do business.

Great. And so it's sort of an industry event, right?

We've been led to believe in our conversations with them that it will include multiple virtual lease-to-own companies.

Okay. Great. That's interesting. Okay. Great. Maybe just taking a step back and looking at the state of the consumer broadly. I know payment activity has been very strong recently. Demand seems to have been very strong. Maybe you can talk about how that has evolved through the pandemic and what you're seeing recently.

Yes. I think in general, if you think back over the last couple of years, certainly you go from not knowing what's going to happen in the pandemic in the first place to -- then stimulus certainly helped a lot of businesses, including ours, helped the customer. And then -- and now there's that adjustment to post stimulus and kind of getting back to normal. And for us, the stimulus was a benefit. We knew things were going to normalize with our customer. It quite honestly normalized faster than we thought it would from a payment standpoint, the -- as far as the customers' ability to how much they can pay and so forth. So it normalized faster, but it's not anything we didn't expect. And in our business, after this adjustment period, this type of environment in the past is a benefit to our customer -- to our company and to our customer as we -- after the adjustment period, the -- without all the stimulus, the -- things tighten from a lending standpoint, tend to tighten as things get tougher, that's good for us. It pushes more customers into our funnel, in the lease-to-own funnel. And what we've seen historically, when things get a little tougher, that's good for us. So there's a bit of an adjustment period here of getting back to normal, if you will. But I think as things get tougher on the middle- and lower middle-income consumer, in the long run, that's a good thing for us as it pushes more people into our funnel after the adjustment period that happened a little faster, as we said on our earnings call, Vincent, a little faster than we had anticipated.

And maybe if we can touch on that a little bit, what's been going on recently, if you could talk about the renewal rates and how that's impacted the business and what we should be thinking about going forward as we normalize further.

The renewal rates, there's a couple of different ways we talk about collections, especially on the Rent-A-Center side, the renewal rates or people keeping the product, renewing it for another week or another month and keeping the product rather than returning it are not as high as they were when stimulus was at its peak. But it hasn't gone all the way back to 2019 either. We think it will end up somewhere in between because of some of the enhancements we've made in the business, technological advances, digital payments, making it easier for the customer to pay, just through when they get a reminder text, they can pay right through the text, things like that. So we made it easier for people to pay without having to come to the store. And what we're seeing is a normalization, but renewal rates are still better. Renewal rates, meaning a customer keeping the product longer, is still better than 2019. So we come backwards on renewal rates but not all the way back down to 2019, which again you take one step backwards, but in the long run, you're two steps forward because you're not all the way back to 2019 normalized rates.

Okay. So you think, I guess, we're normalizing, but actually the new normal is a better environment. And a lot of -- some of it at least is driven by some of the initiatives that you had, including digital. Maybe you could talk about some of those.

Yes. The one I mentioned, I mean, AutoPay rates are, like on the virtual side, of course, they're almost 100%. On the Rent-A-Center side, where a lot of people will still come into the store and make cash payments, we're still in -- I think we've gone over 50% of people signed up for AutoPay, and it's well over 50% people making digital payments. So the -- so much growth on the Rent-A-Center side has come from e-commerce, so there's a lot more virtual business. And with that comes -- and with our enhancements that we've made with that comes a lot more digital payments. So it's easier for the customer to pay either through their phone or their computer and so forth and a lot of enhancements to our website and a lot of enhancements on the way people can pay.

Another macro topic that we've been getting recently is inflation. So maybe if you could talk about how inflation affects kind of your customer and consumer behavior. Are you starting to see it impact the customer? And when we think about growth and sort of your margins, how does that impact it?

Yes, good question. I think it's very similar to what we're talking about on the payment side. There's an adjustment period with the consumer. And certainly, everything is costing more for a lot of people. So there's an adjustment period. That's probably why the normalization of the payment rates happened faster than we had anticipated as people have stretched a little more. But once you get through that adjustment period, again this can become a tailwind for lease-to-own in that it's tougher on someone that may have been one step above -- from a funnel standpoint, one step above lease-to-own. And as things get tougher, they may become more of a lease-to-own customer than upstream a little bit. So initially, it can -- the customer under pressure, again you take a step backwards, which in the long run, that customer being under pressure, just brings us more business, being the one at the bottom of the funnel, if you will. So that's what we've seen in the past. So after the adjustment period, we see it as more as a tailwind than a headwind. And from a margin standpoint, not really an impact on margins because what we -- it's very easy for us on a payment stream to take another $100 product and spread out the lease-to-own payments over on average -- between our two segments, Acima and Rent-A-Center, on average, the average contract is 15 months between the two businesses. So you end up talking about a couple of dollars a week. And so there's not that one big splash. So we can keep our margins because our costs go up, but we can add $1 to a week to the consumer or $10 a month or something like that and maintain our margins without any sticker shock to the consumer.

Okay, that makes sense. So we have an adjustment period, I guess, on this inflation. But when I think about sort of inflation, does that increase ticket prices year-over-year? Your revenues are actually -- have expansion opportunities.

Yes. It does increase ticket. And on the Acima side, the increased ticket is fantastic. And when the supply chain catches up for our merchant partners, then you have the -- that's also part of the adjustment period. Then you have the best of both worlds. Because once you have the product with a little higher ticket, that would be a great thing for us. Because our merchant partners are struggling with supply chain. It doesn't affect Rent-A-Center near as much as it does the retail partner business because Rent-A-Center is more of a limited SKU business. So we buy deep within limited SKUs. Because it's rent-to-own and people rent things or return them, so it's much more -- much more limited in the SKUs that the business model either necessitates or that you can carry because you have to worry about renting it to more than one person. So you have limited SKUs, you buy deep in those SKUs. So the impact is nowhere near the same as it is on large furniture stores or appliance stores these days or furniture stores for that matter. So supply chain catching up will be a nice thing to go along with the ticket increases.

Okay. Got you. And maybe if we could talk about the supply chain a little bit more. So when the supply chain issue started, actually it didn't seem to impact the business that much at all. You managed through it really well. How have the effects lingered? And are they normalizing?

We are -- I am starting to see it a little bit better. And hopefully, that continues. But I think we're starting to -- I think the worst is over. That's what our retail partners are telling us, the worst is over. So I actually had one furniture company tell me the other day that, by spring, they thought they'd be back to normal, which seemed pretty -- I'd heard more like midyear prior to that. But spring would be great if things were pretty normal by spring. So we're seeing it start to get better. I think when it first started, from our standpoint, it took a little while to see the impact because the customer, 6 months ago or earlier in 2021, was still buying stuff. And if they got told it was going to take a couple of months to come in, that was okay. But a couple -- when 2 months turned into 6, right, 2 months turned into 6 and you start seeing cancellations and then that's affecting the business now. So I think at first, it wasn't that big a deal, yes, people were used to waiting for furniture at least a little while. But it just started to compound on itself. And I think that's why it took a little longer maybe to see the negative impact of it in our business.

Okay. And then now the lead times that you're seeing is starting to...

Yes, we're seeing it improving, thankfully.

Okay. Great. Kind of another macro question in sort of the liquidity that's out there in the market in terms of maybe competitive pressures. We've certainly been hearing about a lot of alternative forms of point-of-sale financing, buy now, pay later financing get a lot of traction recently. Does that impact your business at all? Do you see other forms of these fintechs or other guys taking share? Or conversely in this environment, do you see them tightening up and you're kind of getting more volume as a result of that?

We're starting to see a little bit of tightening as we look at our -- what we call advantage scores that come into our decisioning. They're slightly higher, slightly better over the last couple of months, which normally implies a tightening above you. Again, when you're at the bottom end of the funnel and it's a little higher score coming in, it normally implies -- I don't know what else it would imply other than a little tightening above us. So that's good. And I think that will just continue and probably even accentuate a little bit as inflation hangs around a little longer and things like that. So I think that's, in the long run, what I was talking about earlier, good for us. So we see that as a positive. The -- as far as the buy now, pay later, the -- we see them as a gateway for us. And buy now, pay laters don't get down to our -- to credit scores. You'll hear 700, 680. You might hear a buy now, pay later talk about approving people at 650 credit scores. That might be one out of -- 1 customer out of 100 or something like that. But we don't see them dipping down into the lease-to-own. And really, the margins aren't good enough for buy now, pay later to do that. So we see them -- one of the reasons we see them as a gateway -- a couple of reasons. One is through technology, they can be a gateway. We could get the customers that are turned down. We see them exposing to retailers the fact that -- I mean, when retailers put in buy now, pay later to see how many people don't qualify for it, so we -- that could help us when it's shown how many people don't get approved and how many people are actually shopping in the retail store that don't have a 680 or 700 credit score. And so it can drive business towards us. Also, keep in mind, I mean, the buy, now pay later ticket is so much different than ours. I mean, the average ticket on buy now, pay later would be 100, 150, depending on which report you read, who you talk to. But it's not the same as lease-to-own. Now of course, some of them will talk about longer-term installment plans and so forth. But again, it's more competition for lenders, for prime and near-prime lenders than it is for us. For us, it's a gateway is the way we see it.

Okay. Great. And maybe one last one and then I'm going to turn to audience questions. But maybe expounding on that, just the broad marketing plan and the different channels you use to engage with your customers.

Yes, mostly digital channels, social media, again digital marketing and so forth that the -- in both Acima and in Rent-A-Center, search engines and those kind of things, so primarily digital. The exciting thing is in 2022, as the Acima Ecosystem rolls out fully, the Acima Marketplace, the Acima LeasePay Card -- and for those of you who aren't familiar with it, I think Brendan, through the Investor Relations site, there's links to some videos that explain it really well and so forth, right? So -- in Rent-A-Center Investor Relations. And -- but these new products we have, so Ecosystem, really rolling out some direct-to-consumer marketing to drive customers to that. So we're excited about kicking that off in 2022 and really getting some branding around what we're doing there as well with the Marketplace and the LeasePay Card. So pretty -- the short answer is it's pretty much all digital and social media and kind of what today's world we live in. We don't -- the old inserts in the Sunday newspaper, kind of long gone.

Speaking of -- I guess, speaking of digital kind of evolving, are there -- so the demographics of the customer that are coming in there, do you see more younger SKU or more engagement as a result of that?

Yes. I think as you -- any time you go with more digital, you see a younger SKU, which is great. But the more engagement, we're definitely seeing in the Acima Ecosystem. When we say more engagement, just meaning using up more of the approval at the lease -- the lease-to-own approval and the -- how much they're using of that. Because there's -- there's multiple places to shop where -- traditionally, in our business, and still the biggest part of our business, is going in a retail store, and if you don't have good credit, ending up with getting that piece of furniture through Acima and a lease. But digitally, you then can use whatever you didn't use on your open-to-lease, you can use it at the Acima Marketplace and maybe then go in there and grab a tablet from an electronics supplier that's on the Marketplace and so forth. So suddenly, there's more engagement and certainly more used to lease-to-own, and we're more of a customer-centric positioning versus if you think about the transactional -- how transactional is for somebody to go into a Bob's Discount Furniture store and end up using Acima lease to get their furniture, that's transactional. But when you're through the Acima Marketplace and the LeasePay Card, where they're carrying around their approved amount that they didn't use in that Bob's store, it's more customer-centric and more customer-for-life mentality than transactional.

Okay. Great. So I've used up half the time already, I can talk forever. But I'd rather hear investor questions and get some...

I was going to say we talk all the time and you still have all these questions. I don't...

I know. So if there's any audience questions?

Can you talk about the normalization of thinking back past the [indiscernible]? What about the [indiscernible] quicker than you expected? And have you needed to make adjustments to your decision-making algorithms in order to kind of [indiscernible]?

Yes. So as we see the normalization in the payments and in charge-offs because charge-offs were very low through the stimulus, yes is the short answer to your question. We do -- you do have to make adjustments in decisioning. And the good news is the decisioning that we -- that Acima uses that we acquired in February, when we bought Acima, is state-of-the-art and we can make fast changes. We can A/B test so that you don't overreact too fast one way or the other. You can test quickly and take 10% and do this and then find out a couple of weeks what happened with that before you roll it out to the whole engine. So a lot of A/B testing in there, a lot of -- which allows us to react quickly but not overreact, too. So yes, we're -- it's kind of an ongoing process. We have an underwriting committee that meets weekly and reviews it. So you do have to tighten up. And that's part -- between that and the supply chain is why, when we talked about the fourth quarter on our last earnings call, we talked about a GMV rate that was lower than what we had talked about before versus the 20% to 25% we thought for a while, primarily because of the supply chain but a little bit because of having a tightened decisioning would be lower than that.

And to speak to the loss rates, on the Rent-A-Center side, we've seen loss rates as low as 2.5% during the pandemic, which is much lower than what it's been historically. But with the normalization, we see them long term more like 3% to 3.5%. And then on the Acima virtual lease-to-own side, the long-term rates are 6% to 8%. So they were on the low end of that during the pandemic. But over the long term, 6% to 8% is what we're expecting. We did also have to take some reserve adjustments in the third quarter because of the normalization, the faster normalization. Some of that we expected to do more of into 2022 and as well as the fourth quarter since we thought that normalization would occur over a few quarters, not as abruptly as it happened in the third quarter. So there were some balance sheet adjustments there.

To make sure I clearly understand, so you mentioned the 15-year -- or 15-month average term of your lease. So for the Rent-A-Center side versus the Acima and Rent-A-Center traditional, I understand that is basically month-to-month if I understand. Is that right?

Yes. The leases work the same really in both, where the customer can return at any time, but there's ownership options.

Okay.

It's just a lot more returns on the Rent-A-Center side than what you see through the Acima business.

On the Acima side, all the more varied product that comes in because of the Marketplace, the returns, how do you deal with that merchandise?

Through Rent-A-Center, the returns don't flood Rent-A-Center to a negative point. In fact, you get some different product coming back to Rent-A-Center they don't normally carry, can be a good thing because there's a little more variety. I've always said that you could go talk to 1 of our 2,400 store managers, they love it because it gives them a little variety. As long as they don't get too much, they love it, right? And that's the way it works. It's not too much. And you control that also through decisioning, right? I mean, you can -- if you start to get too much, you can control that through decisioning as well.

Can you comment how many share you repurchased in the [ fourth quarter ] on the existing authorization?

Well, the existing -- what I would say is the existing authorization was $250 million. And that's completed. We completed that. And this new $500 million is...

Last quarter, you completed $250 million?

Well, we said on our earnings call, we had said I think that we had done $80 million through October, so -- and now the $250 million is completed, so...

[indiscernible]

That's good. You're good with the math.

And would it be fair to think that [indiscernible] propensity to do this with your incredibly low debt leverage, there would be an inkling to actually actualize the buyback as opposed to just announcing it?

Well, we're not going to comment on that. But the Board approved it yesterday to do a $500 million. And we didn't do it just for the heck of it. So is that fair?

So just a follow-up again on the BNPL, [indiscernible] a discussion with a competitor. It is creating a product to -- again, they see this as a gateway to expand their product reach to customers. What are your thoughts in general?

Are you talking about an installment-to-own product?

Yes, kind of [indiscernible]

One of our competitors with a -- well, we've -- one of our competitors has a secondary financing arm right now. And they do the secondary financing. Most of our retail partners have a second -- have financing, whether it's a lease-to-own company that also has a secondary financing product or it's someone that just does secondary financing. It's -- I mean, we -- that pretty much is above us in the funnel and funnels down to us anyhow, whether it's a lease-to-own company that has it or it's some of the other big ones out there, Genesis, Fortiva, the secondary finance companies that we see in the retail stores that we're in. And they just don't go -- they can't go as low as lease-to-own from a creditworthiness standpoint because there's no return option in the secondary financing. So you've got to be more -- much more careful without a return option with the consumer.

Okay. Actually, maybe kind of expounding on that a bit, so you talked about buy now, pay later potentially being a gateway for the business. So one of the competitors just bought a buy now, pay later company as well as they have the second financing. But instead -- maybe instead of going that path, do you think more of a gateway and partnerships? Is that...

Well, the -- we, from a strategic standpoint, always look at how we can expand. And we -- from time to time, we'll look at, should we try to go upstream with a secondary financing product or buy now, pay later product? So we're always evaluating those things. We'll continue to evaluate them. We've got plenty of white space just in the lease-to-own space with Acima and the Acima Marketplace and so forth. But it's certainly something we don't discount. We have -- we certainly continue to look as a way to move upstream. Quite honestly, the secondary, and I just -- not necessarily part of our corporate strategy today, I'd just say in my personal opinion, I like -- I think secondary financing could have more opportunity than buy now, pay later because it's a space that doesn't have the huge, already established brands in it the way buy now, pay later does. I don't know that I want a small product that goes and competes with some of the goliaths that are out there now. And you know the names, right, starting with Affirm and then working through those names. I don't know that we can -- we want to be in that space with what they've already established. But when you go into the secondary financing that you were talking about, that's a space where most people at this conference wouldn't know the names of the players in that space. So it's -- it would be a much easier space to someday compete in if we decide to go upstream.

Great. Maybe I'll switch now and focus on some questions on Acima. So Acima's growth story, the growth in virtual lease-to-own. But if you could talk about your -- Acima's tech and product investments. I think out of all of the virtual lease-to-own names I cover, Acima seems to be really differentiating with all kinds of products and services that I hear with the fintech-y names like the virtual debit card -- LeasePay, I should say, and affiliate programs and those sorts of things. So maybe you could talk about the investments you've been making.

The tech stuff is really exciting. The Acima Marketplace and the way we are using large retail websites to create our own marketplace and the LeasePay Card, where someone -- it's in test this quarter, but it's working. We -- actually, we're just looking at some testing stuff last night, they came across, where you can take the LeasePay Card into a retail store and with your phone, scan the product, complete the agreement on your phone inside that store. And by the time you check out the LeasePay Card, either on your card or in your virtual wallet, that money has been released and you can pay for it at the cash register through that proprietary technology. So it's working. Again, we saw some proof of it just last night, and really excited about the rollout in 2022. It's really transformational to our business. You no longer will have to -- we love our retail partnerships and we want to continue to expand there, the bigger, the better. From a strategic account, I think you know we had some good strategic account wins last quarter with Whirlpool and P.C. Richard up in the Northeast. So we'll continue to work those larger strategic accounts. And the cycle is pretty long getting them, and we could talk more about that. But in addition to that, this direct-to-consumer stuff is really, really exciting, to be able to go into any retailer, large retailers and be able to do this transaction without even integration with their retailers is really darn exciting. And that's really going to be -- is going to make 2022 exciting.

Is there -- I know it's still in a test phase right now, but any sort of metrics like on the LeasePay product, the uptake and sort of the engagement, the use of open-to-lease amount versus normal?

Yes, it's a little too early for that. But we look forward to, not only in February, when we do our quarterly earnings, we'll have some more data on that in February, but then we've got a -- we had already announced some time in -- I think it will be the latter part of March, an Investor Day. So we'll really be able to get into that. So early next year, there will be a lot of data coming out in our -- in the early stages of that, Vincent.

Okay. Great. Speaking of Whirlpool and P.C. Richard & Son, so in the third quarter, you signed a lot of doors and you've got a lot of competitive wins as well. And if you could -- there's only a few players in virtual lease-to-own that if you could talk about what differentiates you from the other players.

When I think differentiation these days, I really think about probably four things. And some of which you'll hear from everybody, but some of which really, really are unique. Like we think we've got the best tech to be able to integrate with retail partners. And we think we're proving it through the couple of names you just mentioned. So it's technology. It's also our ability or our willingness to supplement the store staff for the higher volume stores, like a P.C. Richard, where we'll supplement the staff with a lease-to-own expert, and depending on the retailer, at least during peak periods, to help their salespeople close the virtual lease-to-own deal. So supplemental staff is a differentiator. And we will -- you don't have to have a bank account to get approved with Acima, unlike our competition. That's another differentiator. And then the fourth one I'd say is the Marketplace we're talking about, the ability for a retailer to not only be integrated with us and then do transactions through us on their floor but also then to put their product in our Marketplace and have additional sales to consumers that don't even -- haven't even gotten into their stores. So I think when -- that's a new one, but that's a heavy differentiator, too, the Acima Marketplace. So those would be the four things off the top of my head that are the big differentiators.

A question just on [indiscernible] player in this space. And it's a company [indiscernible]. I guess, my question is -- two questions there. They made [ 20x earnings ] for a certain property that was broadly looked at because the valuation difference is quite considerable. And they've got EBITDA expectations of mid- to high-teens versus your mid-teens number. Is there a difference in what their financing or something like that? Or do they have a little bit of higher [indiscernible] to invest?

Yes. I don't know because they've been -- it's a private company that FirstCash just bought. So we don't have a lot of data. It wasn't broadly marketed, to answer your question. So we don't have a lot of data on that. So I don't know. I mean, most of us are in that mid-teens range, the 13% to 15% range from an EBITDA standpoint. The high-teens, it will be interesting to see how they do that. Obviously, you can really tighten from a decisioning standpoint, probably get there. We could get to the high-teens if we wanted to reduce volume. Other than reducing volume, we don't know how you'd get to the high-teens, I don't -- other than reducing volume, do you, Maureen...

No.

And we got to the high-teens through -- if you think about it, Acima hit 18% at the peak of stimulus with almost no charge-offs, not almost none but 3% versus the 6% to 8% or something. We got to 18%. But to think that you could maintain that, I'll have to learn from them if they can do that, unless it's just running it real tight, which that I understand how you can do that if you run it real tight. But we want EBITDA dollars, too, not just EBITDA margin, right?

Okay. Great. Maybe sort of sticking to Acima and actually sticking to maybe just a little bit of a broader question, but -- so there's people -- investors, I think, who have been focused on national -- potential national partnership with the national retailers. It seems like a few years ago, there were some additions recently that seems to have slowed down across the virtual lease-to-own space. And I was curious of your views of maybe why is that and when you think that pipeline might resume.

I think that the pipeline is very active as we've talked about. I think there's two reasons why it seems to be going even slower than it was going a couple of years ago. I think supply chain is a big part of it. If you can't service everybody now, you don't worry too much about adding another way for your consumer if you're a large retailer, just pick any of the big ones, you're not that worried about another way for the consumer to buy the household durable goods if you can't supply all the demand that's announced. I think supply chain, and that will ease and there'll be a little more push once there's inventory in the warehouses and so forth. So I think supply chain slowed down and resources, quite honestly. And this is just what we hear. Because we're talking to the largest retailers in the country. And they're all interested and to varying degrees, obviously. But those are the things you hear. Well, we're in no rush because we can't supply everybody that wants our product today. If we're losing this lower-end consumer that's shopping in our store, we don't have the product really to satisfy that right now yet. And again, it's not like there's not a product in the stores. We're talking about the household durable goods. We're talking about furniture, appliances primarily, large appliances and so forth. So there's not -- it's slowed down because -- and then the resources, everybody is struggling for tech resources. And so if you can't get the product and your tech folks are under pressure because you can't get enough of them, integrating with Acima into your system, your ecosystem, into your waterfall, into your POS system is not going to be one of the #1 or #2 priorities for these large retailers. So we think those are temporary. Certainly, the resource constraints and the supply chain is clearly temporary. And we're talking to them all, it's not like they don't want it. So I think it's just a long cycle and we're going to continue to have more big wins. And Acima Marketplace is kind of eye-opening for some of these large retailers, too, to see that, that's another avenue for them, that if they partner with us, they can go on our Marketplace. So I think we'll see that loosening up as resources and supply chain get better.

Just a related question, what sort of longer-term objections do you run into from these very large retailers that you're trying to partner with? Are there some that come in mind that suddenly blocks to try to get across the finish line aside from the short-term issues you said?

Generally speaking, no. You'll hear occasionally, certainly not from all of them, that, "Lease-to-own, tell me what this means when I hear lease-to-own costs our customers too much," and we go through the transaction with them, the cash options the customers have. And that it's not maybe what people might have thought from a stigma standpoint, things like that. So regulatory, are we going to put this in as a regulatory problem? You sit down and talk about the fact that 46 states have lease-to-own laws that have been in place since the very first one from 1983 and none have got overturned. So that's not a ticking time bomb, things like that. So that comes up occasionally. But generally speaking, that doesn't -- that comes up maybe 1 out of 5 of the large ones. And so overall, I'd say no. But if we do hear anything from 1 or 2 out of 10, it would be what I just said. And they're fair questions, and we love answering them because I've done this -- I've been in this business most of my adult life. So I love showing people why it's a great transaction for consumers.

Great. Almost out of time, one last question for me. So you talked about being able to sustain 25% year-over-year GMV growth without the national accounts. I guess, what gives you the confidence in that when it seems like the industry has been slowing? So how do you have that confidence?

I think the -- in the long term, the confidence is there from a white space standpoint, there's so many opportunities and so many large retailers that still don't have lease-to-own, like we were just talking about, the Acima Marketplace and the LeasePay Card. And I'd say in the long term because I think there's -- as we said on the last earnings call, you go -- you slow down first because the supply chain [indiscernible] is we're talking about. But when things normalize from a supply chain standpoint and the customer normalization, the customer adjusts to not getting a whole bunch of extra money or benefits, and once those adjustments are through, we'd be talking 20%, 25% again. There is a slowdown in the meantime, as you know. But what gives us confidence in the long term to be able to do it, it's all about the white space and how many -- the percentage of customers that fit, that need lease-to-own that actually have done it so far, I mean, we're still in single digits, so tremendous opportunity.

Great. We have 1 minute left. Anybody who has questions? Perfect. Well, thanks very much for your time.

Well, thank you, Vincent. Thank you, everybody, for your time.