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Sep 30, 2022
FirstCash Q3 2022 Earnings Report
FirstCash's Q3 2022 earnings were reported with revenues growing 68% and net income increasing 78% year-over-year.
Key Takeaways
FirstCash reported outstanding third-quarter results, driven by strong pawn growth metrics in both the U.S. and Latin America. Consolidated revenues totaled $672 million, a 68% increase over the prior-year quarter, and net income increased 78% over the prior-year quarter. The company's board authorized a new $100 million share repurchase plan and declared a $0.33 quarterly cash dividend.
Diluted earnings per share increased 54% over the prior-year quarter on a GAAP basis.
Net income for the third quarter increased 78% over the prior-year quarter on a GAAP basis.
Consolidated revenues totaled $672 million in the third quarter, representing a 68% increase over the prior-year quarter.
Combined pre-tax operating income from the Company’s two pawn segments increased 27% in the third quarter of 2022 compared to the prior-year quarter and represented 84% of consolidated segment profit.
FirstCash
FirstCash
FirstCash Revenue by Segment
FirstCash Revenue by Geographic Location
Revenue by Segment
Retail Merchandise Sales Revenue
CapyFin.comPawn Loan Fees Revenue
CapyFin.comLeased Merchandise Income Revenue
CapyFin.comInterest & Fees on Finance Receivables 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
The Company outlook for 2022 remains very positive as it continues to expect significant year-over-year revenue and earnings growth based on the first nine-months results and current trends.
Positive Outlook
- Pawn operations are expected to remain the primary earnings driver for 2022.
- Inflationary economic environments have historically driven increased customer demand for both pawn loans and value-priced merchandise offered in pawn stores.
- Cash fundings to customers in both the U.S. and Latin America remain exceptionally robust.
- October retail sales results continue to be strong as well.
- Pawn merchandise inventories remain well-positioned, having normalized to pre-COVID levels with very limited amounts of aged inventory, which continue to drive retail margins at or above historical levels.
Challenges Ahead
- Despite macroeconomic retail headwinds, the Company expects AFF to see continued growth in gross transaction volumes, primarily from increased merchant door counts.
- Revenues are anticipated to grow as well, given the 8% year-over-year increase in beginning Q4 2022 gross leased merchandise and finance receivable balances.
- AFF’s estimated lease and loan loss provisioning for the remainder of the year is expected to reflect higher, pre-pandemic loss rates with additional provisioning overlay for certain portfolios given the current macroeconomic environment.
- AFF utilizes a lease and loan reserve methodology that reflects expected lifetime losses on its portfolios.
- The consolidated effective income tax rate for the nine months ended September 30, 2022 was 21.9%, which included a $4.3 million permanent tax benefit related to the gain on revaluation of contingent acquisition consideration.
Revenue & Expenses
Visualization of income flow from segment revenue to net income