Investors hammered Plano-based Rent-A-Center Inc.'s stock Tuesday after it lowered its outlook for the year, saying its "mostly blue-collar" customer base has been hit hard by higher fuel and utility costs and general inflation.

The stock of the largest U.S. furniture and appliance rental chain fell 19.5 percent. The company has lost one-third of its market value so far this year.

Shares fell $4.71 to $19.41.

Chairman and chief executive Mark E. Speese told analysts during a conference call that "financial challenges facing our customers" increased in June and July, causing the company's outlook to change for the worse.

"We will continue to invest in our core business and carry out initiatives to improve execution at the store level as we work our way through what we believe will be a temporarily difficult period," he said.

The slowdown is across the board geographically and in merchandise categories, with a small increase in delinquencies, he said.

Rent-A-Center now predicts full-year net income of between $2.06 and $2.14 per share, with sales between $2.91 billion and $2.94 billion. Analysts surveyed by Thomson Financial had predicted a full-year profit of $2.32 per share on revenue of $2.92 billion.

Rent-A-Center reported second-quarter earnings of $41.3 million, or 58 cents a share, compared with $39.8 million, or 56 cents a share, last year. Analysts expected net income of 60 cents, according to Thomson Financial.

Revenue rose to $724.2 million from $583.6 million, reflecting the Rent-Way acquisition.

For the third quarter, Rent-A-Center forecasts earnings of 30 cents to 36 cents a share, below analysts' estimate of 46 cents.

Soft demand either from disappearing customers or existing customers renting fewer items "flows right to the bottom line, because stores have fixed costs of delivery trucks, employees and inventory," said Arvind Bhatia, analyst from Sterne Agee & Leach Inc.

Still, the stock price collapse Tuesday "may be an overreaction," Mr. Bhatia said. "The company's trends haven't changed that much to warrant that kind of reduction in value."

Over the past two years, the company has closed stores, settled a major lawsuit and entered the payday loan business.

In April, Rent-A-Center said it will pay $109.3 million to settle a class-action consumer fraud lawsuit filed on behalf of New Jersey customers covering the seven years ending March 16, 2006.

The payment covers $85.8 million to customers and the rest in lawyers' fees. Rent-A-Center admitted no liability in the case, Hilda Perez vs. Rent-A-Center.

Hilda Perez is a cook from Camden who paid Rent-a-Center more than $8,000 to purchase furniture and appliances. But the store wanted $18,000 for the items, which included interest charges that exceeded the state's limit on retail installment credit.