RCII
#Yes, we didn't say that, <UNK>, although, we have been tracking about 20 basis points of sequential improvement every quarter since the rollout of the new sourcing initiative.
So, we've been up 20 basis points in the fourth quarter; 40 in the first quarter; 60 in the second quarter, although in total we were up 120 in the second quarter, but about 60 of that was related to the sourcing event.
I would have expected that we would have been, call it, 60 to 80 basis points up in the core had it not been for the clearance event.
So it did have an impact on gross margins as a result.
Of course now some of those items are in our portfolio, so they certainly will continue to have an impact moving forward.
But we're also in a much better position in terms of percent new moving into the fourth quarter.
So, items that we add to the portfolio now should have a disproportionately positive impact moving forward.
I wouldn't want to suggest that what happened in Q3 will carry over and be the case again in Q4.
I think we also ---+ we're well positioned now as a result of the higher percent new to improve upon the gross margin number that we deliver in the third quarter.
We have not seen instances of retail partners wanting to do this on their own.
Certainly there are other alternatives to Acceptance Now out in the marketplace ---+ none that serves customers to the level and degree that we do by having human beings and co-workers in stores to help overcome objections, and explain the rental transaction, and really nurture the consumer from end-to-end on the process, as well as take the burden off the retail partner by being available to explain the transaction to the consumer.
So from our perspective, albeit there is heightened competition in the marketplace, we still continue to believe in our manned model as we march forward.
Having said that, not seeing retail partners doing this themselves.
In this instance, in the one case I referred to, that retail partner is issuing an RFP to other competitors and ourselves.
And we, frankly, just chose not to participate given the irrational requirements that they were asking for us to acquiesce to.
Again, as we sit here today and we're poised for growth in Acceptance Now, I am a firm proponent of the approach we're taking, and I'm excited about our national accounts approach as well as the other manned locations we've opened year-to-date.
Thank you, Shelby, and thank you, everyone, for joining us today.
Appreciate your interest, your time, your attention, and your support.
Certainly, a challenging third quarter related to our systems issues that, unfortunately, had a material impact in Q3.
As I indicated in my prepared comments, I'm encouraged by current tone of business, trends we're seeing.
And this important fourth quarter, in my opinion, is going to be very productive for us.
So, I look forward to reporting back those results next quarter.
Thank you.
