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Dec 31, 2019
FirstCash Q4 2019 Earnings Report
Reported record Q4 and full-year earnings results.
Key Takeaways
FirstCash reported record fourth quarter and full-year 2019 revenue and net income results, highlighted by strong earnings growth from core pawn operations. The company accelerated organic store growth with a record 89 new store openings in Latin America and acquisitions of 190 additional locations.
Diluted earnings per share increased 17% on a GAAP basis and 13% on an adjusted non-GAAP basis in the fourth quarter of 2019 compared to the prior-year quarter.
Consolidated revenues for the full year totaled $1.9 billion, a 5% increase over the prior year, while fourth quarter revenues increased 4% over the prior-year quarter.
Total retail sales increased 8% for the year and 7% for the quarter. Despite significant holiday season competition from both traditional and internet-based retailers, same-store retail sales in the Company’s stores accelerated sequentially in the fourth quarter, increasing 4% on a U.S. dollar basis and 3% on a constant currency basis.
Consolidated net income was a record $165 million in 2019 and adjusted EBITDA surpassed $300 million for the first time, totaling a record $304 million.
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
The Company is initiating full-year 2020 guidance for diluted earnings per share to be in a range of $4.05 to $4.25.
Positive Outlook
- Plans to open approximately 90 to 100 new full-service pawn stores in 2020 in Latin America, which includes openings in Mexico, Guatemala and Colombia.
- The Company expects to continue repurchasing shares in 2020, with a targeted shareholder payout ratio, which includes share repurchases and dividends, of approximately 75% of net income.
- Comparative earnings for the first five months of 2020 will be particularly impacted by the discontinuance of the Company’s Ohio consumer lending operations until fully lapped in May.
- The earnings guidance for 2020 reflects continued growth from core pawn operations which more than offsets the final remaining headwinds from exiting the consumer loan business in Ohio, which will be fully lapped after the second quarter.
- The guidance also reflects conservative assumptions for both LatAm pawn receivable growth in the first half of 2020 and the Mexican peso exchange rate for the full year.
Challenges Ahead
- The guidance for 2020 includes the impact of an expected reduction in U.S. segment earnings from unsecured consumer lending operations of approximately $0.13 per share.
- The guidance is impacted by approximately $0.12 per share related to conservative assumptions for foreign currency exchange rates, increases in the effective tax rate and the year-over-year increase in the projected number of new store openings.
- The effective income tax rate is expected to range from 27.0% to 27.5% for 2020 compared to the actual rate of 26.7% in 2019, which represents approximately $0.03 to $0.05 of earnings headwind.
- The 2020 guidance reflects continued earnings drag from approximately 90 to 100 planned new store openings but does not assume earnings growth from any potential acquisitions that may happen in 2020.
- Given past volatility in foreign exchange rates, the Company continues to use an estimated average foreign currency exchange rate of 20.0 Mexican pesos / U.S. dollar for 2020.
Revenue & Expenses
Visualization of income flow from segment revenue to net income