FirstCash Holdings Inc (FCFS) Reports Record Pawn Receivables Driving Revenue and Earnings Growth
Revenue: Consolidated gross revenues surpassed $3 billion for the first time, reaching $3.2 billion for 2023, a 15% increase on a GAAP basis year-over-year.
Net Income: Adjusted net income for the year rose 13% compared to the prior year, despite a 13% decrease on a GAAP basis.
Diluted Earnings Per Share: Adjusted diluted earnings per share increased by 17% for the full year compared to the prior year.
EBITDA: Adjusted EBITDA for the full year was $512 million, marking a 17% increase from the previous year.
Store Growth: The company expanded its store count to 2,997 locations with the addition of 157 pawn stores in 2023.
Dividends and Share Repurchases: A quarterly cash dividend of $0.35 per share was declared, and 1,248,000 shares were repurchased in 2023.
2024 Outlook: Positive outlook with expected growth in revenue and earnings across all segments.
On February 1, 2024, FirstCash Holdings Inc (NASDAQ:FCFS) released its 8-K filing, announcing strong financial results for the fourth quarter and full-year ended December 31, 2023. The company, a leading international operator of retail pawn stores and provider of retail point-of-sale payment solutions, has seen a significant increase in pawn receivables, which has been a major driver of revenue and earnings growth.
Company Overview
FirstCash Holdings Inc operates a vast network of pawn stores across the United States and Latin America. The company's business model is centered around offering small loans secured by personal property, with the option for borrowers to either repay the loans with interest or forfeit the property. Interest on these loans and the resale of forfeited property in retail stores constitute the company's primary revenue streams, with a nearly equal split between operations in the United States and Latin America.
Financial Performance and Challenges
FirstCash reported a record-breaking year with consolidated gross revenues exceeding $3 billion for the first time, representing a 15% increase on a GAAP basis year-over-year. The company's adjusted net income and adjusted diluted earnings per share also saw significant increases, indicative of a strong operational performance. However, on a GAAP basis, net income for the fourth quarter decreased by 13% over the prior-year quarter, primarily due to a significant non-cash gain in the prior quarter.
Financial Achievements
The company's financial achievements, including a substantial increase in adjusted EBITDA and the expansion of its store base, underscore its robust financial health and strategic growth initiatives. These achievements are particularly important in the credit services industry, where consistent revenue and earnings growth are key indicators of a company's ability to scale operations and maintain profitability.
Key Financial Metrics
FirstCash's performance is further highlighted by key financial metrics from its income statement and balance sheet. The company's adjusted EBITDA for the full year was $512 million, a 17% increase compared to the prior year. Pawn receivables continued to grow, with a 22% increase in total at year-end compared to the prior year. The company's strong cash flows and balance sheet allowed for strategic investments in growth, including the addition of 157 pawn stores in 2023.
Analysis and Outlook
The company's performance in 2023 sets a positive tone for the 2024 outlook, with anticipated growth in revenue and earnings across all segments. The expansion of pawn operations and the addition of new stores are expected to continue driving the company's earnings. Moreover, the growth in AFF's market presence and the increase in active retail and service locations by 26% as of year-end position FirstCash for further expected revenue and earnings growth in 2024.
For more detailed information and analysis, investors are encouraged to review the full 8-K filing.
Explore the complete 8-K earnings release (here) from FirstCash Holdings Inc for further details.
This article first appeared on GuruFocus.
