EZCORP (EZPW) Misses Q1 EPS by 6c

EZCORP (NASDAQ: EZPW) reported Q1 EPS of $0.16, $0.06 worse than the analyst estimate of $0.22. Revenue for the quarter came in at $222.4 million versus the consensus estimate of $231.17 million.

GUIDANCE:

Chief Executive Officer Stuart Grimshaw commented, "Underlying results reflect the current management focus of reducing aged inventory levels at a time when our customers have excess cash in their hands. In Latin America we saw strong sales growth of 18% year-over-year, which was offset to a degree by the anticipated reduction in merchandise margin and loan balances. U.S. Pawn has also been focused on the efficient disposition of aged inventory with expected lower merchandise margins attached to this activity. Total consolidated revenues improved 3%, while we gained efficiencies in our operations expenses and effectively managed aged inventory. While our ongoing efforts to optimize inventory and upgrade systems, as well as the more recent government social welfare programs in Mexico, impact near-term results and loan balances, we remain focused on driving operating efficiencies, free cash flow and higher returns on earning assets, and reducing corporate expense.

“In December, we introduced our differentiated digital platform, Lana, to customers in select stores in Florida, and completed the rollout of our new point-of-sale system in the U.S. and Mexico. We expect both these initiatives to enhance customer acquisition and retention, optimize lending decisions and expand earnings through improved loan redemption rates, resulting pawn service charge revenues and sales margins.

“Importantly, we began repurchasing shares under the three-year, $60 million program that the Board approved in December 2019. We repurchased almost $1.0 million worth of stock by the end of the quarter, and to date we have repurchased approximately 415,000 shares for $2.7 million. Looking ahead, our free cash flow and strong balance sheet will enable us to enhance growth via new store openings, M&A opportunities that meet our strategic and financial criteria, and ongoing reinvestments, as well as return capital to shareholders through repurchasing publicly traded Class A shares under the share repurchase program.”

For earnings history and earnings-related data on EZCORP (EZPW) click here.

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