FirstCash Holdings Inc
For the period ended Jun 30, 2024. Filed Jul 29, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 29, 2024
FCFS$185.67-1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-29.
0000840489-24-000087
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-29.
0000840489-24-000108
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 151 previous paragraphs and 201 current paragraphs.
87 unchanged; 55 reworded; 44 added; 9 removed; 0 previous and 15 current paragraphs rearranged.
Tables are not compared: 17 previous and 23 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (44)
Current report
Latin America retail merchandise sales increased 6% (3% on a constant currency basis) to $134.4 million during the second quarter of 2024 compared to $126.6 million for the second quarter of 2023. Same-store retail sales also increased 6% (3% on a constant currency basis) during the second quarter of 2024 compared to the second quarter of 2023. The increase in total and same-store retail sales was primarily due to increased inventory levels during the second quarter of 2024 compared to the second quarter of 2023 and greater demand for value-priced, pre-owned merchandise. The gross profit margin on retail merchandise sales was 36% during the second quarter of 2024 compared to 35% during the second quarter of 2023.
Current report
(2)Includes $0.2 million of provision for lease losses from intersegment transactions for both the three months ended June 30, 2024 and 2023 related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding these intersegment transactions, consolidated provision for lease losses for the three months ended June 30, 2024 and 2023 totaled $47.7 million and $52.9 million, respectively.
Current report
(1)Includes $0.2 million of provision for lease losses from intersegment transactions for both the three months ended June 30, 2024 and 2023 related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding these intersegment transactions, consolidated provision for lease losses for the three months ended June 30, 2024 and 2023 totaled $47.7 million and $52.9 million, respectively.
Current report
Provision for loan losses increased 10% to $31.1 million during the second quarter of 2024 compared to $28.2 million during the second quarter of 2023, which was primarily due to a slight increase in loan loss provisioning rates used during the second quarter of 2024 compared to the second quarter of 2023 and the 3% increase in gross transaction volumes. As a percentage of gross transaction volume, the provision for loan losses increased from 28% during the second quarter of 2023 to 30% during the second quarter of 2024.
Current report
Operating Results for the Six Months Ended June 30, 2024 Compared to the Six Months Ended June 30, 2023
Current report
U.S. Pawn Segment
Current report
The following table presents segment pre-tax operating income and other operating metrics of the U.S. pawn segment for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 (dollars in thousands). Operating expenses include salary and benefit expenses of pawn store-level employees, occupancy costs, bank charges, security, insurance, utilities, supplies and other costs incurred by the pawn stores.
Current report
(1)Includes $2.1 million and $3.5 million of retail merchandise sales from intersegment transactions for the six months ended June 30, 2024 and 2023, respectively, related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding these intersegment sales, consolidated U.S. retail merchandise sales for the six months ended June 30, 2024 and 2023 totaled $465.0 million and $403.3 million, respectively.
Current report
(2)Includes $1.1 million and $1.8 million of cost of retail merchandise sold from intersegment transactions for the six months ended June 30, 2024 and 2023, respectively, related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding these intersegment sales, consolidated U.S. cost of retail merchandise sold for the six months ended June 30, 2024 and 2023 totaled $271.2 million and $231.6 million, respectively.
Current report
U.S. retail merchandise sales increased 15% to $467.1 million during the six months ended June 30, 2024 compared to $406.7 million for the six months ended June 30, 2023. Same-store retail sales increased 5% during the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase in total retail sales was primarily due to incremental sales contributions from acquired stores. During the six months ended June 30, 2024, the gross profit margin on retail merchandise sales in the U.S. was 42% compared to a margin of 43% during the six months ended June 30, 2023 reflecting continued demand for value-priced, pre-owned merchandise and low levels of aged inventory.
Current report
U.S. pawn loan fees increased 21% to $243.3 million during the six months ended June 30, 2024 compared to $201.7 million for the six months ended June 30, 2023. Same-store pawn fees increased 12% during the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase in total and same-store pawn loan fees was primarily due to store growth and continued growth in demand for pawn loans.
Current report
U.S. operating expenses increased 12% to $244.1 million during the six months ended June 30, 2024 compared to $217.9 million during the six months ended June 30, 2023 while same-store operating expenses increased 3% compared with the prior-year period. The increase in operating expenses was primarily due to store growth.
Current report
The U.S. segment pre-tax operating income for the six months ended June 30, 2024 was $187.2 million, which generated a pre-tax segment operating margin of 25% compared to $153.4 million and 24% in the prior year, respectively. The increase in the segment pre-tax operating income and margin reflected increased net revenue from both acquired and existing stores partially offset by the increase in segment expenses.
Current report
Latin America Pawn Segment
Current report
The following table presents segment pre-tax operating income and other operating metrics of the Latin America pawn segment for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 (dollars in thousands). Operating expenses include salary and benefit expenses of pawn store-level employees, occupancy costs, bank charges, security, insurance, utilities, supplies and other costs incurred by the pawn stores.
Current report
Latin America retail merchandise sales increased 8% (2% on a constant currency basis) to $265.3 million during the six months ended June 30, 2024 compared to $245.5 million for the six months ended June 30, 2023. Same-store retail sales increased 7% (1% on a constant currency basis) during the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase in total and same-store retail sales was primarily due to increased inventory levels throughout the first half of 2024 and greater demand for value-priced, pre-owned merchandise. The gross profit margin on retail merchandise sales was 36% during the six months ended June 30, 2024 and 35% during the six months ended June 30, 2023.
Current report
Latin America pawn loan fees increased 13% (6% on a constant currency basis) to $117.3 million during the six months ended June 30, 2024 compared to $104.1 million for the six months ended June 30, 2023. Same-store pawn fees also increased 13% (6% on a constant currency basis) during the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase in total and same-store constant currency pawn loan fees was primarily due to increased average receivable balances outstanding during the six months ended June 30, 2024.
Current report
The segment pre-tax operating income for the six months ended June 30, 2024 was $69.0 million, which generated a pre-tax segment operating margin of 17% compared to $70.6 million and 19% in the prior year, respectively. The decrease in the segment pre-tax operating income and margin reflected an increase in operating expenses, partially offset by an increase in net revenue.
Current report
Retail POS Payment Solutions Segment
Current report
(1)Includes $0.9 million and $1.1 million of depreciation of leased merchandise from intersegment transactions for the six months ended June 30, 2024 and 2023, respectively, related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding these intersegment transactions, consolidated depreciation of leased merchandise for the six months ended June 30, 2024 and 2023 totaled $230.4 million and $204.1 million, respectively.
Current report
(2)Includes $0.3 million of provision for lease losses from intersegment transactions for both the six months ended June 30, 2024 and 2023 related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding these intersegment transactions, consolidated provision for lease losses for the six months ended June 30, 2024 and 2023 totaled $90.7 million and $101.9 million, respectively.
Current report
(1)Includes $0.3 million of provision for lease losses from intersegment transactions for both the six months ended June 30, 2024 and 2023 related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding these intersegment transactions, consolidated provision for lease losses for the six months ended June 30, 2024 and 2023 totaled $90.7 million and $101.9 million, respectively.
Current report
LTO Operations
Current report
Leased merchandise income increased 7% to $400.2 million during the six months ended June 30, 2024 compared to $373.2 million for the six months ended June 30, 2023, which was primarily due to higher leased merchandise balances outstanding during the six months ended June 30, 2024 compared to the six months ended June 30, 2023.
Current report
Depreciation of leased merchandise increased 13% to $231.3 million during the six months ended June 30, 2024 compared to $205.2 million during the six months ended June 30, 2023. As a percentage of leased merchandise income, depreciation of leased merchandise increased from 55% during the six months ended June 30, 2023 to 58% during the six months ended June 30, 2024 primarily as a result of a slight increase in customers taking advantage of early buyout or other early payment options.
Current report
Provision for lease losses decreased 11% to $91.0 million during the six months ended June 30, 2024 compared to $102.2 million for the six months ended June 30, 2023, which was primarily due to a slight decrease in lease loss provisioning rates used during the six months ended June 30, 2024 compared to the six months ended June 30, 2023 and the 1% decrease in gross transaction volumes. As a percentage of gross transaction volume, the provision for lease losses decreased from 33% during the six months ended June 30, 2023 to 30% during the six months ended June 30, 2024.
Current report
Retail Finance Operations
Current report
Operating expenses decreased 1% to $70.1 million during the six months ended June 30, 2024 compared to $70.6 million during the six months ended June 30, 2023, which was primarily due to lower receivable acquisition costs, the realization of information technology cost synergies from the Company’s acquisition of AFF, partially offset by increased variable costs associated with the 1% increase in gross transaction volumes. As a percentage of segment revenues, operating expenses decreased slightly from 15% during the six months ended June 30, 2023 to 14% during the six months ended June 30, 2024.
Current report
The retail POS payment solutions segment pre-tax operating income for the six months ended June 30, 2024 was $59.1 million compared to $49.0 million in the six months ended June 30, 2023. The increase was primarily the result of increased segment income resulting from increases in net revenue and a decrease in segment expenses.
Current report
Table of Contents
Current report
Consolidated Results of Operations
Current report
Corporate Expenses and Taxes
Current report
Depreciation and amortization decreased 11% to $26.4 million during the six months ended June 30, 2024 compared to $29.8 million in the six months ended June 30, 2023, primarily due to a $3.7 million decrease in amortization of acquired AFF intangible assets.
Current report
Table of Contents
Current report
Table of Contents
Current report
Table of Contents
Current report
Table of Contents
Current report
GOVERNMENTAL REGULATION UPDATE
Current report
On October 5, 2017, the CFPB released its small-dollar loan rule (the “SDL Rule”), which was subsequently revised on July 7, 2020. Traditional possessory, non-recourse pawn loans are not covered under the SDL Rule. The SDL Rule defines some of the RISA transactions that AFF purchases and some of the bank loans that AFF sub-services as transactions that are covered under the rule. After resolution of some challenges to the SDL Rule itself and the constitutionality of the CFPB, on July 3, 2024, trade groups filed a petition for a rehearing with the Fifth Circuiten banc. If the Fifth Circuit does not grant the petition, the SDL Rule is expected to go into effect on March 30, 2025. The SDL Rule imposes certain obligations and limitations associated with the origination and servicing of covered transactions as of its effective date. At this time, the Company does not believe that the implementation of the SDL Rule as proposed will have a material impact on the Company’s future results of operations or financial condition.
Current report
Table of Contents
Showing the first 40 of 44 passages. Open the source sections for the rest.
Removed paragraphs (9)
Previous report
Retail Merchandise Sales Operations
Previous report
Pawn Lending Operations
Previous report
Retail Merchandise Sales Operations
Previous report
Latin America retail merchandise sales increased 10% (flat on a constant currency basis) to $130.8 million during the first quarter of 2024 compared to $118.9 million for the first quarter of 2023. Same-store retail sales increased 9% (flat on a constant currency basis) during the first quarter of 2024 compared to the first quarter of 2023. The flat total and same-store constant currency retail sales was primarily due to constrained inventory levels throughout the first quarter of 2024. The gross profit margin on retail merchandise sales improved to 36% during the first quarter of 2024 compared to 34% during the first quarter of 2023 as a result of reduced discounting given tighter inventory levels.
Previous report
Pawn Lending Operations
Previous report
(2)Includes $0.2 million and $0.1 million of provision for lease losses from intersegment transactions for the three months ended March 31, 2024 and 2023, respectively, related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding the intersegment transactions, consolidated provision for lease losses for the three months ended March 31, 2024 and 2023 totaled $43.0 million and $49.1 million, respectively.
Previous report
(1)Includes $0.2 million and $0.1 million of provision for lease losses from intersegment transactions for the three months ended March 31, 2024 and 2023, respectively, related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding the intersegment transactions, consolidated provision for lease losses for the three months ended March 31, 2024 and 2023 totaled $43.0 million and $49.1 million, respectively.
Previous report
GOVERNMENTAL REGULATION
Previous report
In conjunction with the Cash America merger in 2016, the Company recorded certain lease intangibles related to above- or below-market lease liabilities of Cash America, which are included in the operating lease right of use asset on the consolidated balance sheets. As the Company continues to opportunistically purchase real estate from landlords at certain Cash America stores, the associated lease intangible, if any, is written off and gain or loss is recognized. The Company has adjusted the applicable financial measures to exclude these gains or losses given the variability in size and timing of these transactions and because they are non-cash, non-operating gains or losses. The Company believes this improves comparability of operating results for current periods presented with prior periods.
Reworded paragraphs (55)
Previous wording
As of March 31, 2024, the Company operated 2,997 pawn store locations composed of 1,179 stores in 29 U.S. states and the District of Columbia, 1,721 stores in 32 states in Mexico, 67 stores in Guatemala, 15 stores in Colombia and 15 stores in El Salvador.
Current wording
As of June 30, 2024, the Company operated 3,018 pawn store locations composed of 1,201 stores in 29 U.S. states and the District of Columbia, 1,716 stores in 32 states in Mexico, 72 stores in Guatemala, 17 stores in El Salvador and 12 stores in Colombia.
Previous wording
The following table details pawn store count activity for the three months ended March 31, 2024:
Current wording
The following tables detail pawn store count activity for the three and six months ended June 30, 2024:
Previous wording
(1)In addition to new store openings, the Company strategically relocated two stores in the U.S. during the three months ended March 31, 2024.
Current wording
(1)In addition to new store openings, the Company strategically relocated four stores in the U.S. during the three months ended June 30, 2024. During the six months ended June 30, 2024, the Company strategically relocated six stores in the U.S.
Previous wording
As of March 31, 2024, AFF provided LTO and retail POS payment solutions for consumer goods and services through a network of approximately 12,200 active retail merchant partner locations located in all 50 U.S. states, the District of Columbia and Puerto Rico. This compares to the active door count of approximately 9,800 locations at March 31, 2023.
Current wording
As of June 30, 2024, AFF provided LTO and retail POS payment solutions for consumer goods and services through a network of approximately 12,800 active retail merchant partner locations located in all 50 U.S. states, the District of Columbia and Puerto Rico. This compares to the active door count of approximately 10,500 locations at June 30, 2023.
Previous wording
The financial statements have been prepared in accordance with GAAP. The significant accounting policies and estimates that the Company believes are the most critical to aid in fully understanding and evaluating its reported financial results have been reported in the Company’s 2023 Annual Report on Form 10-K. There have been no changes to the Company’s significant accounting policies for the three months ended March 31, 2024.
Current wording
The financial statements have been prepared in accordance with GAAP. The significant accounting policies and estimates that the Company believes are the most critical to aid in fully understanding and evaluating its reported financial results have been reported in the Company’s 2023 Annual Report on Form 10-K. There have been no changes to the Company’s significant accounting policies for the six months ended June 30, 2024.
Previous wording
(1)Includes $1.0 million and $1.7 million of retail merchandise sales from intersegment transactions for the three months ended March 31, 2024 and 2023, respectively, related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding the intersegment transactions, consolidated U.S. retail merchandise sales for the three months ended March 31, 2024 and 2023 totaled $236.0 million and $209.0 million, respectively.
Current wording
(1)Includes $1.1 million and $1.8 million of retail merchandise sales from intersegment transactions for the three months ended June 30, 2024 and 2023, respectively, related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding these intersegment sales, consolidated U.S. retail merchandise sales for the three months ended June 30, 2024 and 2023 totaled $229.0 million and $194.3 million, respectively.
Previous wording
(2)Includes $0.6 million and $0.9 million of cost of retail merchandise sold from intersegment transactions for the three months ended March 31, 2024 and 2023, respectively, related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding the intersegment transactions, consolidated U.S. cost of retail merchandise sold for the three months ended March 31, 2024 and 2023 totaled $139.3 million and $121.0 million, respectively.
Current wording
(2)Includes $0.6 million and $0.9 million of cost of retail merchandise sold from intersegment transactions for the three months ended June 30, 2024 and 2023, respectively, related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding these intersegment sales, consolidated U.S. cost of retail merchandise sold for the three months ended June 30, 2024 and 2023 totaled $131.9 million and $110.6 million, respectively.
Previous wording
U.S. retail merchandise sales increased 12%, totaling $237.0 million during the first quarter of 2024 compared to $210.7 million for the first quarter of 2023. Same-store retail sales increased 4% in the first quarter of 2024 compared to the first quarter of 2023. The increase in total retail sales was primarily due to incremental sales contributions from acquired stores. The gross profit margin on retail merchandise sales in the U.S. was 41% in the first quarter of 2024 and 42% in the first quarter of 2023, reflecting continued demand for value-priced, pre-owned merchandise and low levels of aged inventory.
Current wording
U.S. retail merchandise sales increased 17%, totaling $230.1 million during the second quarter of 2024 compared to $196.0 million for the second quarter of 2023. Same-store retail sales increased 7% in the second quarter of 2024 compared to the second quarter of 2023. The increase in total retail sales was primarily due to incremental sales contributions from acquired stores. The gross profit margin on retail merchandise sales in the U.S. was 42% in the second quarter of 2024 and 43% in the second quarter of 2023, reflecting continued demand for value-priced, pre-owned merchandise and low levels of aged inventory.
Previous wording
U.S. inventories increased 21% from $178.6 million at March 31, 2023 to $216.8 million at March 31, 2024. The increase was primarily due to incremental inventories from acquired stores and an increase in same-store inventories as a result of the higher pawn loan balances noted below. Inventories aged greater than one year in the U.S. decreased to 1% at March 31, 2024 compared to 2% at March 31, 2023.
Current wording
U.S. inventories increased 24% from $180.4 million at June 30, 2023 to $223.4 million at June 30, 2024. The increase was primarily due to incremental inventories from acquired stores and an increase in same-store inventories as a result of the higher pawn loan balances noted below. Inventories aged greater than one year in the U.S. decreased to 1% at June 30, 2024 compared to 2% at June 30, 2023.
Previous wording
U.S. pawn loan receivables as of March 31, 2024 increased 23% in total and 14% on a same-store basis compared to March 31, 2023. The increase in total pawn receivables was due to incremental pawn loans from acquired stores and an increase in same-store pawn receivables, which the Company believes was primarily due to continued inflationary pressures driving additional demand for pawn loans and tightened underwriting for other competing forms of consumer credit.
Current wording
U.S. pawn loan receivables as of June 30, 2024 increased 22% in total and 11% on a same-store basis compared to June 30, 2023. The increase in total pawn receivables was due to incremental pawn loans from acquired stores and an increase in same-store pawn receivables, which the Company believes was primarily due to continued inflationary pressures driving additional demand for pawn loans and tightened underwriting for other competing forms of consumer credit.
Previous wording
U.S. pawn loan fees increased 20% to $123.0 million during the first quarter of 2024 compared to $102.7 million for the first quarter of 2023. Same-store pawn fees in the first quarter of 2024 increased 12% compared to the first quarter of 2023. The increase in total and same-store pawn loan fees was primarily due to store growth and continued growth in demand for pawn loans.
Current wording
U.S. pawn loan fees increased 22% to $120.3 million during the second quarter of 2024 compared to $99.0 million for the second quarter of 2023. Same-store pawn fees in the second quarter of 2024 increased 12% compared to the second quarter of 2023. The increase in total and same-store pawn loan fees was primarily due to store growth and continued growth in demand for pawn loans.
Previous wording
U.S. operating expenses increased 8% to $118.9 million during the first quarter of 2024 compared to $109.8 million during the first quarter of 2023. The increase in operating expenses was primarily due to store growth.
Current wording
U.S. operating expenses increased 16% to $125.2 million during the second quarter of 2024 compared to $108.2 million during the second quarter of 2023. The increase in operating expenses was primarily due to store growth.
Previous wording
The U.S. segment pre-tax operating income for the first quarter of 2024 was $96.6 million, which generated a pre-tax segment operating margin of 26% compared to $81.0 million and 24% in the prior year, respectively. The increase in the segment pre-tax operating income and margin reflected an improved net revenue margin partially offset by the increase in segment expenses.
Current wording
The U.S. segment pre-tax operating income for the second quarter of 2024 was $90.6 million, which generated a pre-tax segment operating margin of 24% compared to $72.4 million and 23% in the prior year, respectively. The increase in the segment pre-tax operating income and margin reflected increased net revenue from both acquired and existing stores partially offset by an increase in segment expenses.
Previous wording
Latin American segment pre-tax operating income for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 benefited from a 9% favorable change in the average value of the Mexican peso compared to the U.S. dollar. The translated value of Latin American earning assets as of March 31, 2024 compared to March 31, 2023 also benefited from an 8% favorable change in the end-of-period Mexican peso compared to the U.S. dollar. Constant currency results are non-GAAP financial measures, which exclude the effects of foreign currency translation and are calculated by translating current-year results at prior-year average exchange rates. See the “Constant Currency Results” section in “Non-GAAP Financial Information” below for additional discussion of constant currency operating results.
Current wording
Latin American segment pre-tax operating income for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 benefited from a 3% favorable change in the average value of the Mexican peso compared to the U.S. dollar. The translated value of Latin American earning assets as of June 30, 2024 compared to June 30, 2023 was also impacted by an 8% unfavorable change in the end-of-period Mexican peso compared to the U.S. dollar. Constant currency results are non-GAAP financial measures, which exclude the effects of foreign currency translation and are calculated by translating current-year results at prior-year average exchange rates. See the “Constant Currency Results” section in “Non-GAAP Financial Information” below for additional discussion of constant currency operating results.
Previous wording
Latin America inventories increased 8% (flat on a constant currency basis) from $79.0 million at March 31, 2023 to $85.6 million at March 31, 2024. The flat constant currency inventories were primarily due to lower pawn loan receivable balances throughout much of 2023 creating less forfeited inventory. Inventories aged greater than one year in Latin America were 1% at both March 31, 2024 and 2023.
Current wording
Latin America inventories increased 6% (14% on a constant currency basis) from $86.7 million at June 30, 2023 to $92.0 million at June 30, 2024. The increased inventories were primarily due to increases in pawn loan receivable balances over the past several quarters creating more forfeited inventory. Inventories aged greater than one year in Latin America were 1% at both June 30, 2024 and 2023.
Previous wording
Latin America pawn loan receivables increased 16% (7% on a constant currency basis) as of March 31, 2024 compared to March 31, 2023. On a same-store basis, pawn loan receivables increased 16% (7% on a constant currency basis) as of March 31, 2024 compared to March 31, 2023. The increase in constant currency total and same-store pawn receivables is primarily due to larger loan sizes driven in part by a slightly increased mix of higher value jewelry loans.
Current wording
Latin America pawn loan receivables were flat (8% increase on a constant currency basis) as of June 30, 2024 compared to June 30, 2023. On a same-store basis, pawn loan receivables increased 1% (8% on a constant currency basis) as of June 30, 2024 compared to June 30, 2023. The increase in constant currency total and same-store pawn receivables is primarily due to increasing demand for pawn loans and larger loan sizes driven in part by a slightly increased mix of higher value jewelry loans.
Previous wording
Latin America pawn loan fees increased 16% (6% on a constant currency basis), totaling $56.6 million during the first quarter of 2024 compared to $48.9 million for the first quarter of 2023. Same-store pawn fees increased 16% (5% on a constant currency basis) in the first quarter of 2024 compared to the first quarter of 2023. The increase in total and same-store constant currency pawn loan fees was primarily due to increased pawn receivable balances.
Current wording
Latin America pawn loan fees increased 10% (7% on a constant currency basis), totaling $60.7 million during the second quarter of 2024 compared to $55.2 million for the second quarter of 2023. Same-store pawn fees also increased 10% (7% on a constant currency basis) in the second quarter of 2024 compared to the second quarter of 2023. The increase in total and same-store constant currency pawn loan fees was primarily due to increased average pawn loan receivable balances outstanding during the second quarter of 2024 compared to the second quarter of 2023.
Previous wording
Operating expenses increased 21% (11% on a constant currency basis) to $67.4 million during the first quarter of 2024 compared to $55.8 million during the first quarter of 2023. Same-store operating expenses increased 18% (8% on a constant currency basis) compared to the prior-year period. The increase in total and same-store constant currency operating expenses was primarily driven by general inflationary impacts and continued increases in the federally mandated minimum wage and increased costs associated with required employee benefit programs.
Current wording
Operating expenses increased 14% (11% on a constant currency basis) to $67.9 million during the second quarter of 2024 compared to $59.5 million during the second quarter of 2023. Same-store operating expenses increased 12% (9% on a constant currency basis) compared to the prior-year period. The increase in total and same-store constant currency operating expenses was primarily driven by increased store counts, accelerated store opening activity, general inflationary impacts and continued increases in the federally mandated minimum wage and increased costs associated with required employee benefit programs.
Previous wording
The segment pre-tax operating income for the first quarter of 2024 was $31.9 million, which generated a pre-tax segment operating margin of 16% compared to $32.9 million and 18% in the prior year, respectively. The decrease in the segment pre-tax operating income and margin reflected an increase in operating expenses, partially offset by an increase in net revenue.
Current wording
The segment pre-tax operating income for the second quarter of 2024 was $37.1 million, which generated a pre-tax segment operating margin of 18% compared to $37.7 million and 20% in the prior year, respectively. The decrease in the segment pre-tax operating income and margin reflected the increase in operating expenses, partially offset by an increase in net revenue.
Previous wording
(1)Includes $0.5 million and $0.6 million of depreciation of leased merchandise from intersegment transactions for the three months ended March 31, 2024 and 2023, respectively, related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding the intersegment transactions, consolidated depreciation of leased merchandise for the three months ended March 31, 2024 and 2023 totaled $120.3 million and $101.6 million, respectively.
Current wording
(1)Includes $0.4 million and $0.5 million of depreciation of leased merchandise from intersegment transactions for the three months ended June 30, 2024 and 2023, respectively, related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding these intersegment transactions, consolidated depreciation of leased merchandise for the three months ended June 30, 2024 and 2023 totaled $110.2 million and $102.5 million, respectively.
Previous wording
The following table provides a detail of gross transaction volumes originated during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 (in thousands):
Current wording
The following table provides a detail of gross transaction volumes originated during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023 (dollars in thousands):
Previous wording
The following table details retail POS payment solutions earning assets as of March 31, 2024 as compared to March 31, 2023 (in thousands):
Current wording
The following table details retail POS payment solutions earning assets as of June 30, 2024 as compared to June 30, 2023 (dollars in thousands):
Previous wording
(1)Includes $0.3 million and $1.2 million of intersegment transactions as of March 31, 2024 and 2023, respectively, related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding the intersegment transactions, consolidated net leased merchandise as of March 31, 2024 and 2023 totaled $157.8 million and $148.9 million, respectively.
Current wording
(1)Includes $0.2 million and $1.4 million of intersegment transactions as of June 30, 2024 and 2023, respectively, related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores that are eliminated upon consolidation. Excluding these intersegment transactions, consolidated net leased merchandise as of June 30, 2024 and 2023 totaled $142.9 million and $143.1 million, respectively.
Previous wording
The following table details the changes in the allowance for lease and loan losses and other portfolio metrics for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 (in thousands):
Current wording
The following table details the changes in the allowance for lease and loan losses and other portfolio metrics for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023 (dollars in thousands):
Previous wording
Leased merchandise, before allowance for lease losses, increased 4% as of March 31, 2024 compared to March 31, 2023. This increase was primarily due to increased transaction volumes.
Current wording
Leased merchandise, before allowance for lease losses, decreased 4% as of June 30, 2024 compared to June 30, 2023. The decrease was primarily due to decreased transaction volumes and a slight increase in the number of customers taking advantage of the early buyout or other early payment options.
Previous wording
The allowance for lease losses increased 3% to $95.8 million as of March 31, 2024 compared to $93.3 million as of March 31, 2023, which was primarily due to the increase in leased merchandise. As a percentage of lease merchandise, the allowance was 38% at both March 31, 2024 and 2023.
Current wording
The allowance for lease losses decreased 7% to $103.3 million as of June 30, 2024 compared to $111.0 million as of June 30, 2023, which was primarily due to the decrease in leased merchandise. As a percentage of lease merchandise, the allowance was 42% at June 30, 2024 and 43% at June 30, 2023.
Previous wording
Leased merchandise income increased 12% to $205.7 million during the first quarter of 2024 compared to $183.4 million during the first quarter of 2023, which was primarily due to the higher leased merchandise balances and an increase in customers taking advantage of the early buyout option during the first quarter of 2024 compared to the first quarter of 2023.
Current wording
Leased merchandise income increased 3% to $194.6 million during the second quarter of 2024 compared to $189.8 million during the second quarter of 2023, which was primarily due to higher average leased merchandise balances outstanding during the second quarter of 2024 compared to the second quarter of 2023.
Previous wording
Depreciation of leased merchandise increased 18% to $120.8 million during the first quarter of 2024 compared to $102.2 million during the first quarter of 2023. The increase was primarily due to higher leased merchandise balances and an increase in customers taking advantage of the early buyout option during the first quarter of 2024 compared to the first quarter of 2023. As a percentage of leased merchandise income, depreciation of leased merchandise increased from 56% during the first quarter of 2023 to 59% during the first quarter of 2024.
Current wording
Depreciation of leased merchandise increased 7% to $110.6 million during the second quarter of 2024 compared to $103.1 million during the second quarter of 2023. As a percentage of leased merchandise income, depreciation of leased merchandise increased from 54% during the second quarter of 2023 to 57% during the second quarter of 2024 primarily as a result of a slight increase in the number of customers taking advantage of the early buyout or other early payment options.
Previous wording
Provision for lease losses decreased 12% to $43.2 million during the first quarter of 2024 compared to $49.2 million during the first quarter of 2023, which was primarily due to a decrease in lease loss provisioning rates used during the first quarter of 2024 compared to the first quarter of 2023, partially offset by the 2% increase in gross transaction volumes. As a percentage of gross transaction volume, the provision for lease losses decreased from 33% during the first quarter of 2023 to 28% during the first quarter of 2024. The lease loss provisioning rates during the first half of 2023 were elevated as a result of expected higher charge-offs. Actual charge-offs from 2023 vintages came in lower than expected, resulting in the release of certain lease loss reserves in the first quarter of 2024.
Current wording
Provision for lease losses decreased 10% to $47.8 million during the second quarter of 2024 compared to $53.0 million during the second quarter of 2023, which was primarily due to a slight decrease in lease loss provisioning rates used during the second quarter of 2024 compared to the second quarter of 2023 and the 5% decrease in gross transaction volumes. As a percentage of gross transaction volume, the provision for lease losses decreased from 34% during the second quarter of 2023 to 33% during the second quarter of 2024.
Previous wording
Finance receivables, before allowance for loan losses, increased 6% as of March 31, 2024 compared to March 31, 2023. This increase was primarily due to increased transaction volumes.
Current wording
Finance receivables, before allowance for loan losses, increased 1% as of June 30, 2024 compared to June 30, 2023. The increase was primarily due to increased transaction volumes.
Previous wording
The allowance for loan losses increased 8% to $96.0 million as of March 31, 2024 compared to $88.6 million as of March 31, 2023, which was primarily due to the increase in finance receivables. As a percentage of finance receivables, the allowance increased from 46% at March 31, 2023 to 48% at March 31, 2024.
Current wording
The allowance for loan losses increased 7% to $100.0 million as of June 30, 2024 compared to $93.1 million as of June 30, 2023, which was primarily due to the increase in finance receivables and a slight increase in loan loss provisioning rates used during the second quarter of 2024 compared to the second quarter of 2023. As a percentage of finance receivables, the allowance was 46% at June 30, 2023 compared to 49% at June 30, 2024.
Previous wording
Operating expenses increased 4% to $34.8 million during the first quarter of 2024 compared to $33.5 million during the first quarter of 2023, which was primarily due to the 3% increase in gross transaction volumes. As a percentage of segment revenues, operating expenses decreased slightly from 14% during the first quarter of 2023 to 13% during the first quarter of 2024.
Current wording
Operating expenses decreased 5% to $35.3 million during the second quarter of 2024 compared to $37.1 million during the second quarter of 2023, which was primarily due to lower receivable acquisition costs, the realization of information technology cost synergies from the Company’s acquisition of AFF and decreased variable costs associated with the 2% decrease in gross transaction volumes. As a percentage of segment revenues, operating expenses decreased slightly from 15% during the second quarter of 2023 to 14% during the second quarter of 2024.
Previous wording
The retail POS payment solutions segment pre-tax operating income for the first quarter of 2024 was $33.1 million compared to $23.2 million in the first quarter of 2023. The increase was primarily the result of increased segment income resulting from an increase in net revenue, partially offset by the increase in segment expenses.
Current wording
The retail POS payment solutions segment pre-tax operating income for the second quarter of 2024 was $25.9 million compared to $25.8 million in the second quarter of 2023. The slight increase was primarily the result of the decrease in segment expenses, partially offset by a decrease in net revenue.
Previous wording
Administrative expenses increased 10% to $43.1 million during the first quarter of 2024 compared to $39.0 million in the first quarter of 2023, primarily due to increased incentive compensation expense, the increase in pawn store count and a 9% change in the average value of the Mexican peso resulting in higher U.S. dollar translated administrative expenses in Latin America. As a percentage of revenue, administrative expenses were 5% during both the first quarter of 2023 and the first quarter of 2024.
Current wording
Administrative expenses increased 13% to $45.6 million during the second quarter of 2024 compared to $40.4 million in the second quarter of 2023, primarily due to increased incentive compensation expense, the increase in pawn store count and a 3% change in the average value of the Mexican peso resulting in higher U.S. dollar translated administrative expenses in Latin America. As a percentage of revenue, administrative expenses were 5% during both the second quarter of 2023 and the second quarter of 2024.
Previous wording
Depreciation and amortization decreased 12% to $13.2 million during the first quarter of 2024 compared to $15.1 million in the first quarter of 2023, primarily due to a $2.0 million decrease in amortization of acquired AFF intangible assets.
Current wording
Depreciation and amortization decreased 10% to $13.2 million during the second quarter of 2024 compared to $14.8 million in the second quarter of 2023, primarily due to a $1.7 million decrease in amortization of acquired AFF intangible assets.
Previous wording
Interest expense increased 22% to $25.4 million during the first quarter of 2024 compared to $20.9 million in the first quarter of 2023, primarily due to higher floating interest rates on the Company’s unsecured bank credit facilities and higher average total long-term debt balances outstanding. See Note 7 of Notes to Consolidated Financial Statements and “Liquidity and Capital Resources.”
Current wording
Interest expense increased 20% to $25.2 million during the second quarter of 2024 compared to $21.1 million in the second quarter of 2023, primarily due to higher floating interest rates on the Company’s unsecured bank credit facilities and higher average total long-term debt balances outstanding. See Note 8 of Notes to Consolidated Financial Statements and “Liquidity and Capital Resources.”
Previous wording
Consolidated effective income tax rates for the first quarter of 2024 and 2023 were 25.1% and 25.0%, respectively.
Current wording
Consolidated effective income tax rates for the second quarter of 2024 and 2023 were 25.8% and 25.4%, respectively.
Previous wording
Interest and fees on finance receivables increased 5% to $57.4 million during the first quarter of 2024 compared to $54.6 million during the first quarter of 2023. This increase was primarily due to the higher year-over-year finance receivable balances, partially offset by a slight decline in portfolio yield primarily as a result of AFF expanding its offerings and merchant relationships in certain services sector verticals in the first quarter of 2024, some of which provide slightly lower interest rates.
Current wording
Interest and fees on finance receivables increased 1% to $114.2 million during the six months ended June 30, 2024 compared to $112.8 million for the six months ended June 30, 2023. The increase was primarily due to the higher year-over-year finance receivable balances, partially offset by a slight decline in portfolio yield primarily as a result of AFF expanding its offerings and merchant relationships in certain services sector verticals in the six months ended June 30, 2024, some of which provide slightly lower interest rates.
Previous wording
Provision for loan losses increased 4% to $30.4 million during the first quarter of 2024 compared to $29.3 million during the first quarter of 2023, which was primarily due to the 4% increase in gross transaction volumes. As a percentage of gross transaction volume, the provision for loan losses was 30% during both the first quarter of 2023 and the first quarter of 2024.
Current wording
Provision for loan losses increased 7% to $61.5 million during the six months ended June 30, 2024 compared to $57.5 million for the six months ended June 30, 2023, which was primarily due to a slight increase in loan loss provisioning rates used during the six months ended June 30, 2024 and the 4% increase in gross transaction volumes. As a percentage of gross transaction volume, the provision for loan losses increased from 29% during the six months ended June 30, 2023 to 30% during the six months ended June 30, 2024.
Previous wording
During the three months ended March 31, 2024, the Company acquired one pawn store in the U.S. for a purchase price of $1.3 million, net of cash acquired and subject to future post-closing adjustments. The Company evaluates potential acquisitions based upon growth potential, purchase price, available liquidity, strategic fit and quality of management personnel, among other factors.
Current wording
During the six months ended June 30, 2024, the Company acquired 27 pawn stores in the U.S. and acquired one pawn license that was used to open a pawn store in the state of Nevada for a cumulative purchase price of $99.2 million, net of cash acquired and subject to future post-closing adjustments. The Company evaluates potential acquisitions based upon growth potential, purchase price, available liquidity, strategic fit and quality of management personnel, among other factors.
Showing the first 40 of 55 pairs. Open the source sections for the rest.
Rearranged current paragraphs (15)
Current report — wording carried from elsewhere
Interest and fees on finance receivables decreased 2% to $56.8 million during the second quarter of 2024 compared to $58.2 million during the second quarter of 2023, which was primarily due to a slight decline in portfolio yield primarily as a result of AFF expanding its offerings and merchant relationships in certain services sector verticals in the second quarter of 2024, some of which provide slightly lower interest rates.
Current report — wording carried from elsewhere
Latin American segment pre-tax operating income for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 benefited from a 6% favorable change in the average value of the Mexican peso compared to the U.S. dollar.
Current report — wording carried from elsewhere
Operating expenses increased 17% (11% on a constant currency basis) to $135.3 million during the six months ended June 30, 2024 compared to $115.3 million during the six months ended June 30, 2023. Same-store operating expenses increased 15% (9% on a constant currency basis) compared to the prior-year period. The increase in total and same-store operating expenses was primarily driven by increased store counts, accelerated store opening activity, general inflationary impacts and continued increases in the federally mandated minimum wage and increased costs associated with required employee benefit programs.
Current report — wording carried from elsewhere
Retail POS Payment Solutions Operating Results
Current report — wording carried from elsewhere
The following table presents segment pre-tax operating income of the retail POS payment solutions segment for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 (dollars in thousands). Operating expenses include salary and benefit expenses of certain operations-focused departments, merchant partner incentives, bank and other payment processing charges, credit reporting costs, information technology costs, advertising costs and other operational costs incurred by AFF.
Current report — wording carried from elsewhere
The following table provides a detail of gross transaction volumes originated during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 (dollars in thousands):
Current report — wording carried from elsewhere
The following table details the changes in the allowance for lease and loan losses and other portfolio metrics for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 (dollars in thousands):
Current report — wording carried from elsewhere
(2)Calculated as provision for lease or loan losses as a percentage of the respective gross transaction volume originated.
Current report — wording carried from elsewhere
(3)Calculated as charge-offs, net of recoveries, as a percentage of the respective average earning asset balance before allowance for lease or loan losses.
Current report — wording carried from elsewhere
(4)Calculated as the percentage of the respective contractual earning asset balance owed that is 1 to 89 days past due (the Company charges off leases and finance receivables when they are 90 days or more contractually past due).
Current report — wording carried from elsewhere
The following table reconciles pre-tax operating income of the Company’s U.S. pawn segment, Latin America pawn segment and retail POS payment solutions segment, discussed above, to consolidated net income for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 (dollars in thousands):
Current report — wording carried from elsewhere
(1)Represents the elimination of intersegment transactions related to the Company offering AFF’s LTO payment solution in its U.S. pawn stores. For further detail, see Note 10 of Notes to Consolidated Financial Statements.
Current report — wording carried from elsewhere
Administrative expenses increased 12% to $88.6 million during the six months ended June 30, 2024 compared to $79.4 million during the six months ended June 30, 2023, primarily due to increased incentive compensation expense, the increase in pawn store count and a 6% change in the average value of the Mexican peso resulting in higher U.S. dollar translated administrative expenses in Latin America. As a percentage of revenue, administrative expenses were 5% during both the six months ended June 30, 2023 and 2024.
Current report — wording carried from elsewhere
Interest expense increased 21% to $50.6 million during the six months ended June 30, 2024 compared to $42.0 million for the six months ended June 30, 2023, primarily due to higher floating interest rates on the Company’s unsecured bank credit facilities and higher average total long-term debt balances outstanding. See Note 8 of Notes to Consolidated Financial Statements and “Liquidity and Capital Resources.”
Current report — wording carried from elsewhere
Consolidated effective income tax rates for the six months ended June 30, 2024 and 2023 were 25.4% and 25.2%, respectively.