First Cash Financial Services (FCFS) Tops Q4 EPS by 10c, Beats on Revenues; FY18 EPS Mid-Point Guidance Below Consensus

First Cash Financial Services (NYSE: FCFS) reported Q4 EPS of $0.94, $0.10 better than the analyst estimate of $0.84. Revenue for the quarter came in at $480.2 million versus the consensus estimate of $466.27 million.

Fiscal 2018 Outlook

• The Company is initiating its fiscal full-year 2018 guidance for adjusted diluted earnings per share to be in the range of $3.15 to $3.35, which compares to 2017 adjusted diluted earnings per share of $2.74. The guidance represents adjusted earnings per share growth to be in a range of 15% to 22%.
• The guidance for fiscal 2018 is presented on a non-GAAP basis, as it does not include the impact of Merger expenses. Given the difficulty in predicting the amount and timing of future ongoing Merger expenses, the Company cannot reasonably provide a full reconciliation of adjusted guidance to GAAP guidance. However, the Company expects Merger expenses to be within a range of $0.03 to $0.06 per share, net of tax, for fiscal 2018.
• The estimate of expected adjusted earnings per share includes the following assumptions:
  • An expected effective income tax rate for fiscal 2018 of approximately 26.5% to 27.5%, which compares to the effective rate, excluding the impact of the Tax Act, of 32.3% in fiscal 2017.
  • An estimated exchange rate of approximately 20.0 Mexican pesos / U.S. dollar for fiscal 2018 compared to the foreign exchange rate of 18.9 Mexican pesos / U.S. dollar in fiscal 2017. The projected change in the exchange rate represents an earnings headwind of approximately $0.08 to $0.10 per share for 2018.
  • A conservative forecast for pawn fees in many hurricane-impacted locations in Texas and most of the legacy Cash America markets in general, with expected year-over-year growth in pawn loan balances in these locations not occurring until the second half of 2018.
  • An anticipated earnings drag of approximately $0.14 to $0.17 per share due to expected strategic reductions in consumer lending operations, primarily through store closings and elimination of remaining non-franchised check cashing operations, during 2018. Consumer lending operations are expected to contribute approximately 3.5% of revenue in 2018.
  • Plans to open or acquire approximately 85 stores in 2018, primarily in Latin America, including its first stores in Colombia.

GUIDANCE:

First Cash Financial Services sees FY2018 EPS of $3.15-$3.35, versus the consensus of $3.33.

For earnings history and earnings-related data on First Cash Financial Services (FCFS) click here.

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