Rent-A-Center, Aaron's Q1 profit beats Street

April 27 (Reuters ) - Furniture and appliance rental companies Rent-A-Center Inc (RCII.O) and Aaron's Inc (AAN.N) reported better-than-expected quarterly profit as consumers opted to rent, rather than buy, new items amid a recession.

"Our business has been especially strong in recent quarters as more consumers are finding it extremely attractive to use the Aaron's option of obtaining basic home furnishings necessities with no credit checks and the ability to return the merchandise at any time," Aaron's Chief Executive Robert Loudermilk said in a statement.

Aaron's, formerly known as Aaron Rents, earned 65 cents a share, beating estimates by 13 cents.

For fiscal 2009, Aaron's raised its earnings forecast to $1.90 to $2.05 a share, from $1.72 to $1.87 a share. It expects revenue of $1.80 billion, excluding franchisees, up from $1.75 billion.

Analysts had expected the company to earn $1.82 a share on revenue of $1.77 billion.

Rent-A-Center posted earnings of 65 cents a share, excluding items, and revenue of $728.2 million, compared with analysts' average estimate of 55 cents a share on revenue of $732.4 million, according to Reuters Estimates.

Rent-A-Center raised the lower end of its 2009 earnings outlook to $2.18 to $2.32 a share. It forecast revenue of $2.78 billion to $2.84 billion. Analysts had expected the company to earn $2.18 a share on revenue of $2.86 billion.

Plano, Texas-based Rent-A-Center expects 2009 sales at stores open at least a year, or same-store sales, to fall 1 percent to 3 percent.

Shares of Atlanta-based Aaron's were trading up 8 percent at $31.00 after the bell. They closed at $28.68 Monday on the New York Stock Exchange.

Shares of Rent-A-Center were trading down 5 percent at $20.64 after the bell. They closed at $21.69 on Nasdaq.

(Reporting by Poojya Trivedi in Bangalore; Editing by Anne Pallivathuckal)