FirstCash Holdings, Inc. (NASDAQ:FCFS) — the world’s largest operator of pawn retail stores — reported record third-quarter results that surpassed analyst estimates on Thursday. Despite the strong performance, shares slipped 4.77% in pre-market trading, as investors focused on broader outlook concerns.
The company posted adjusted earnings of $2.26 per share, topping the $1.91 consensus forecast, while revenue rose to $935.58 million, comfortably above the $854.21 million analysts had expected. Consolidated revenue climbed 12% year over year, and net income jumped 28% on a GAAP basis.
Performance was fueled in part by the August acquisition of H&T, the U.K.’s largest pawnbroker, adding 286 locations to FirstCash’s global footprint.
“FirstCash’s third quarter operating results were outstanding, evidenced by accelerating revenue growth, strong margins and continued earnings growth in both the U.S. and Latin American pawn segments coupled with a strong partial quarter contribution from the recently acquired H&T pawn stores in the U.K.,” said Rick Wessel, Chief Executive Officer.
Demand across the company’s markets remained robust, with same-store pawn receivables up 13% in the U.S., 18% in Latin America, and 25% in the U.K. in local currency terms. Meanwhile, the company’s American First Finance (AFF) segment delivered solid profit growth thanks to lower loss provisions and improved margins.
By segment, U.S. pawn operations generated record pre-tax operating income of $112 million, a 14% increase year over year. The Latin America segment posted $47 million in pre-tax income, up 22%, while the newly added U.K. business contributed $18 million.
The board declared a quarterly dividend of $0.42 per share and approved a new $150 million share repurchase program. During the third quarter, FirstCash bought back 230,000 shares for about $30 million.
Citing year-to-date strength, the company raised revenue growth forecasts for both its U.S. and Latin American divisions and increased the expected earnings contribution from H&T. FirstCash now anticipates H&T accretion of $0.18 to $0.20 per share in the fourth quarter.