First Cash Financial Services (FCFS) Strong on Pawn Shops
By:
TraderMark Wednesday, January 28, 2009 12:56 PM
First Cash Financial Servuces (FCFS) is another pawn shop operator/cash advance store but quite similar to
EZCORP (EZPW) (heavier emphasis on pawn shops) rather than
Cash America (CSH) which is more balanced among the two. After the whole sector has been beaten down of late based on Obama threats to the cash advance busines, it had a very nice day yesterday
on earnings - one way or the other I intend to make a buck in this sector; so far it's been elusive.
Ironically both FCFS and EZPW are making strong pushes into Mexico ...
- Pawn shop operator First Cash Financial Services Inc. said Tuesday its fourth-quarter profit more than doubled, boosted by strong sales at its stores in Mexico. Shares jumped $1.43, or 9.4 percent, to $16.65 in morning trading.
- For the final three months of the year, the company reported net income of $11.5 million, or 39 cents per share. That is up from a profit of $5.7 million, or 18 cents per share, a year earlier. Excluding discontinued operations, the company reported income of $10.7 million, or 36 cents per share, compared with $9.2 million, or 29 cents per share, in the fourth quarter of 2007.
- Total revenue grew 15 percent to $91.6 million from $79.6 million in the prior-year quarter, driven by strong same-store sales growth. Same-store sales, or sales at stores open at least a year, increased 8 percent.
- In Mexico, pawn revenue increased 31 percent during the quarter as a result of both store expansion and strong same-store sales growth, the company said. In the U.S., total pawn revenue grew 13 percent during the quarter.
- As of Dec. 31, the company operated 525 pawn and short-term loan stores in 12 U.S. states and in Mexico, an increase of 14 percent over the prior year.
Guidance
- Pawn shop operator First Cash Financial Services Inc. on Tuesday provided 2009 earnings guidance that was at or slightly below analysts' expectations. The company forecast full-year earnings of between $1.36 and $1.38 per share, representing 8 percent to 10 percent growth over 2008 earnings.
- First Cash said it expects significant growth in customer traffic and transaction volumes in 2009, especially in Mexico.
- The company projects that 75 percent to 80 percent of 2009 earnings will be derived from pawn operations.
- First Cash said it plans to open between 55 and 60 new stores in Mexico this year, and a limited number of new pawn stores in the U.S.
Long, short EZCORP in fund; short EZCORP in personal account
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