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Mar 31, 2021
FirstCash Q1 2021 Earnings Report
Reported strong first-quarter earnings and cash flows, exceeding internal expectations, highlighting the diversity of FirstCash’s business model and continued profitability despite COVID-19 impacts.
Key Takeaways
FirstCash reported strong first-quarter earnings results and cash flows, exceeding internal expectations. Diluted earnings per share increased 5% on a GAAP basis. The company opened 24 new stores in Latin America and acquired two U.S. stores. The Board of Directors declared a $0.30 per share quarterly cash dividend, an increase of 11% compared to the previous quarterly dividend.
Retail results were stronger than anticipated, driving a 3% increase in merchandise gross profit compared to Q1 2020.
Retail sales gross margins of 42% remained at record levels, a significant improvement over the 38% in Q1 2020.
Improving pawn loan demand in Latin America was offset by lower demand in the U.S., impacted by stimulus payments.
The adjusted EBITDA margin was over 16%, equaling the pre-pandemic margin in Q1 2020.
FirstCash
FirstCash
FirstCash Revenue by Segment
FirstCash Revenue by Geographic Location
Revenue by Segment
Retail Merchandise Sales Revenue
CapyFin.comPawn Loan Fees Revenue
CapyFin.comWholesale Scrap Jewelry Sales Revenue
CapyFin.comRevenue by Geographic Location
U.S. Pawn Revenue
CapyFin.comLatin America Pawn Revenue
CapyFin.com Forward Guidance
Given the continued uncertainties related to COVID-19, the Company is not currently providing earnings guidance. However, the following factors are expected to impact operating trends in 2021:
Positive Outlook
- The extent to which COVID-19 continues to impact the Company’s operations will depend on future developments, which remain uncertain and cannot be predicted with confidence.
- The Company has a solid pipeline of additional stores leased, under construction or completed and awaiting permits.
- The Company expects 50 to 60 new store openings in 2021.
- The Company continues to believe there are significant opportunities for accretive consolidations, expansions and/or relocations of acquired small format stores in Mexico.
- Daily new loan origination activity has started to improve since early April, with same-store new loan volumes currently down approximately 25% to 30% compared to 2019, indicating that the impact from the latest round of stimulus payments has peaked and is beginning to recover.
Challenges Ahead
- U.S. pawn loan demand has dampened slightly this year, which the Company attributes primarily to the two rounds of federal stimulus payments.
- Resulting same-store pawn balances are currently down 18% compared to the prior year (2020) and 32% compared to more normalized 2019 levels.
- The recovery of domestic loan demand will still likely be tempered for the next several months.
- Retail sales could be impacted by lower inventory levels in the near term.
- Inventories, while expected to recover on a lagging basis to pawn receivables, begin the second quarter 23% below the prior year which will continue to impact retail sales volumes in the near term.
Revenue & Expenses
Visualization of income flow from segment revenue to net income