FirstCash Q2 2021 Earnings Report
Key Takeaways
FirstCash reported strong second quarter earnings driven by recovery in pawn receivables and retail operations. The company acquired a 26-store chain of pawn stores in Texas and opened 12 de novo stores. They returned cash to shareholders through dividends and share repurchases.
Diluted earnings per share increased 13% on a GAAP basis and 15% on a non-GAAP basis compared to the prior-year quarter.
Pawn loans outstanding increased 35% over the prior year and 29% on a constant currency basis.
Retail sales gross margins of 42% remained at record levels and improved over the 40% gross margins achieved in the second quarter of last year.
Adjusted EBITDA margin for the second quarter of 2021 was 15% compared to a 13% margin in the second quarter of 2020.
FirstCash
FirstCash
FirstCash Revenue by Segment
FirstCash Revenue by Geographic Location
Forward Guidance
Given the continued uncertainties related to COVID-19 and the associated government assistance programs, the Company is not currently providing earnings guidance.
Positive Outlook
- Pawn loan origination activity continues to improve, with U.S. same-store new loan volumes thus far in July down only 10% compared to 2019 originations.
- U.S. same-store pawn balances are currently up 28% at July 20, 2021 compared to the prior year.
- In Mexico, same-store pawn loans are currently 34% above prior-year levels and only 4% below this date in 2019.
- The effective income tax rate for the full year of 2021 is expected to range from 26.5% to 27.5%.
- The Company continues to expect 50 to 60 new store openings for the full year 2021.
Challenges Ahead
- 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 impact of future governmental responses, most notably the monthly advance payment of federal child tax credits that began in mid-July in the U.S. is uncertain.
- Same-store pawn fees in the third quarter will continue to be below normalized levels.
- The Company cannot currently predict the impact, if any, of the monthly advance payments of the federal child tax credit which began in mid-July 2021.
- Uncertainty in the pace of the economic recovery in the markets.
Revenue & Expenses
Visualization of income flow from segment revenue to net income