EZCORP (EZPW) 6 Aug 222022 Q3 Earnings call transcript

Good morning, ladies and gentlemen. Welcome to the EZCorp Third Quarter Fiscal 2022 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time.

As a reminder, this call may be recorded. turn with over Three to Young, Jean like Relations Investor Part now the to conference Marie I'd Advisors. Please go ahead, Jean.

good Thank and morning, you, everyone.

which investors.ezcorp.com. remarks, referring or During will from are slides, download at prepared viewing available website our our for we to be

I'd in risks the remind everyone Company's begin, future a and performance Company's presentation otherwise unless results filed as expected of fluctuations conference due our the effect materials, that certain annual, contain periods. to results presentation are that and for identified, differ may to an those Actual discrete are adjusted expectations. for currency the the foreign operating presented or current the as number and slides like noted are remove based with discussed These other forward-looking Commission. we this in call periods basis items. Before our other well factors statements of on Exchange from to Securities statements regarding and reports financial other future and on quarterly materially as And expressed

call the on Chief Executive EZCorp's Officer. are and Tim us Joining Jugmans, Officer, Lachie Financial Chief Given; today

to Now turn to the call Given, I'd Lachie? over like Lachie

Thanks, good morning, Jean, and everyone.

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As environment we we enter demand products. both increasing a these more of macroeconomic for globally, expect challenging

On prices credit to from alternative inflationary the customers and the side, be by lending tightening of impacted gas lenders. pressures, our availability continue high

customers demand we general live. secondhand increase while all the new the great goods expect after for We which for deals, in to existing looking also environment and search as value-for-money

theme. Slide continues be and People, X. to our operating to on Pawn Moving Passion core

Our diverse and engaged teams drive us success.

enhance progression and to and have and toward to team that goals. improve retain our in continuously and system, and our their industry, outstanding continue and believe customer us digital needs. differentiated culture platform, combined continue with productive, sheet, our ways motivated best I we training best shows choice balance passionate, make for corporate retail we We IT most strong strategic in team can customers' We invest to believe our POS we Slide that X pawn and committed so the the and driving experience. the recycled X-year talent. development liquid find our new hiring, service, the attract and

transforming are the modernizing the pawn experience and We core customer business.

customers Our quarter. points-based have XD and for grown We loyalty have program received our been and added implemented prevention by this substantially card online payment again and Secure fraud options customer well protection payments. on

U.S. we success. ran points our was in campaign national Additionally, bonus first and it a drive enrollment, great the sales store to and

themes Slide Turning to for X. our key financial on QX

increase it the is earnings, PLO up for to and mentioned, a As driver year-over-year, was and significant XX% revenue in leading XX% most PSC.

What net we up a call of XXX%. call profit, EBITDA XX% in improvements revenue, saw X. while Slide and now expenses inventory gross and gross significant percentage and we X%. earnings result, a year-over-year revenue, was as to we As used was aged under up profit, keeping it

the in expenses and see to year-over-year, You labor. total primarily increases due count store increased can

global percentage profit to strengthening pleased survey from On on the engagement profit our $X.X However, increased year-over-year XX XX% percentage last months, as employees store but past were decreased of core for percentage a systems. talk and from we XX%. total with expenses our a increased with as gross expenses a X, from with people about the we XX%. XX%. to increasing, global month Store XX% million gross decreased of of a G&A to focus significantly gross but and decreased a profit of benchmark. year-over-year, as very XX% results, Slide We count beating conducted

and Our and we our through which ongoing commitment to in team financial member focus improvement operating cultural our to development, our continue initiatives in drive training believe contributes and to people experience, on results. and investing excellent transformation, our inclusion

culture. We are our people hiring who retaining and great with are aligned corporate

enthusiastic is team Our engaged. and

is Company. and infrastructure processes and increasing technology, our Slide stores customer our here. simplifying the growth our in pillar This third On our X-year and be is operational X, pleased progress innovation the efficiency. enhance our to and to modernize we teams for transforming experiences, with continue the to continue We strategy,

providing EZ+ our than more in quarter. layaway both quarter, customers We this customers versus stars Google enrolled, XX,XXX We over quarter, for America. the million collected in and XXX,XXX servicing. online convenient reviews and U.S. now system has in the million options with averaging X.X loyalty received Our payments Latin over $X X.X pawn last

XXX continues stores the in pilot in Our inventory U.S. showcase

quarter piloting evaluating the full de We search more and acquired XX uptake stores XX%. disciplined the continue to We've eight XX much area. remains customers becomes in outlines as the We're acquisition we Mexico. pipeline robust, stores in convenient. and products perspective, capturing new Dallas an increased From our opportunities. for we Latin America are in experience three ESG opened stores converters our remain Slide in in XX% when the these to from highlights. And novo cash also inorganic the e-commerce during

us of the nature, economy. makes Our circular business, very part by its

a in We of facility goods or have secondhand recycler local distribution use significant of factory, We trucking. neighborhoods. hundreds do not heavy

items and them the are We from landfill. millions of useful extending saving of life

procured instruments goods, million quarter, items and approximately jewelry. and tools, sold consumer we over This cameras, pre-owned household ranging musical X.X million X.X items, [electronics], from

an essential, regulated a we quarter, financial resource provide sources. third for underserved addition, we and are In In launched inclusion Group. simple, significant transparent our this remains those who traditional focus. Black and Affinity Diversity by Empowerment

As quarter members. talent processes, Week our and in all I've Career review to the training this introduced team and development and programs, global of for said, first and succession planning invest we continue

impact of in turn we to now $XXX,XXX addition, Jugmans, to in to like I can Tim? our our funding the which team details on the over provide the positively which our awarded innovative communities call the genuine In members. over team Foundation and few we past in But of and serve. has Tim customers our CFO, families would in members, scholarship years, we're results. ways more EZCorp search always to financial

results. PLO $XXX.X the highest Thanks, at Lachie. million, a financial Slide which year-over-year ended consolidated basis, in history. the our XX% XX on up EZCorp details period is

up X%. revenue year, FY range was with both end normal above up back up our balance XX%, but PLO growth XX%. driven with sales as XX%, margins and same-store by increased of acquisitions. now same-store to 'XX PSC growth the last XX% We same-store sales expected, are Merchandise PLO high of falling by the QX over was

kept in with of consolidated up days selling X.Xx. great on million, first EBITDA It focus another $XX.X quarter Our turnover XX strong the at was inventory has inventory XXX%.

focus customers' was better our model PLO same-store U.S. to XX. PLO by operations PSC Pawn primarily operating Slide up our XX% by year-over-year, our pawn and growth. rose continued on driven driven Turning serving needs. XX%, on enhanced

the Slide quarter Pawn third to up EBITDA the XX merchandise focuses due the down XX% sales side X% the point expected up U.S. with $XX.X grew XX% Segment business, Pawn were Latin basis. of On XX%, gross for in XXX the year. PLO prior our operations. same-store on X% profit a retail sales increased on activity. quarter basis American the for or drop XX% expenses on with was sales increased million, merchandise store Store margin.

X%. sales additional sales profit a XXX by higher driven as As was XX% were from up margins was a PLO on the XX%, points. by XX% improved up pawn we as due with offset same-store expenses Latin gross up EBITDA PLO PSC basis the and to year-over-year, XX%, gross to Merchandise growth Merchandise basis. Store well up down transactions, to same-store up due increased result, Pawn by in due last store sales under occurred that increased the primarily only merchandise offset PSC increased America XXX profit, increase acquisition mainly million X% June expenses. Even during or by control, $X.X year. same-store have the sales, average XX% coming expenses stores. was higher same-store kept

litigation quarter, last buyback has and the trading was delaying cautious Board execute tentative three-year quarter and our agreement in share our We took reached program. settlement given approved reported a in a the a this any million were early finalized announced. As repurchases We restrictions. repurchases we to May, approach unable $XX share of settlement until in matter window

look consideration of as in now and opportunistic the alternative taking and program opportunities. market and repurchases share are a this capital general to to previously, responsible needs position availability execute way, into announced begin we'll an conditions, in and, investment liquidity attractive We

as levels should on a consolidated business model. to forward, pre-COVID these PLO effects our of beyond we basis, record improved the increase continue as well seasonality levels see move we as back to seeing Looking

continue growth inflationary continue on to practice a to further Also, expense inventory is this to return to the likely PLO in have increase levels continue levels. have basis sales prior as likely normal in rise. pressures and margin quarter, seen we As we see in suggested line discounting reduction gross we and sales as to wage quarters, sequential to with are continue a as

We consistent results our seen each continues are on initiatives execution strategic to quarter. in be pleased that the financial strong,

pre-COVID are exciting closing superior We comments. PLO reach from our levels has that to record an I few will to it and but with to business in us position Lachie business profitability, the scale put over turn of here. see model now a levels excited for operating

The consistently EZ delivering the Tim. is behalf of our team Thanks, are proud we results on shareholders. financial of excellent

team our with and with deliver resonate open to continues our questions. for Passion excellent results and the shareholders. Pawn operating and that, And People, of Operator? mantra we'll for operating Our financial call

[Operator take Jefferies. Instructions] of our first from We'll today question SagivHartmayer

on Congratulations quarter. another great

you a play? past customer of as At behavior normalization, PLO, are now the the a some levels, outstanding amount, Or be inflation? behavior changing in a store some big may increase in seeing are level, still other On guys of of terms had there inflationary pressures. customer trends, at you which from result XXXX factors

worries. No

a take me at Let Tim. crack that,

Sure.

as you are play to said, levels, there and recovered think of we different PLO bunch forces a I prepandemic at think has here.

there customer. a to the that's thirdly, what pressure, the we begins think, alternatives, credit impact as to our from as tightening But we other had And inflationary of would you turn. is seems factors, seasonality to really on prices availability including economy mentioned, significant be gas returning then expect. higher Firstly, are

that So world have that to returning our overlaid our think level, post think back store the in the I customer impacted customers seems stimulus behavior through factors demand. be that seasonal those that -- normal look, by all fact we living of were that to this we at COVID, seasonal

are there really here balance some play think factors positive driving sheet. at our I So loan

to how the It's we very that? quarters, and should helpful. large seasonality, With over next And about inflation mentioned the mind Despite thinking be one you G&A. question. growth more few in return contained

you've world, And businesses. think it's I not a but think all across just a significant I challenge. key I it in business challenge. is it seen our the think mean I

give those the a going costs. think containing has why don't forward, of you a going very as you're team done good rising. I think Tim, in well? I job see But them to it shot the past

do salaries like an extremely as is We've contain contracts trying of these But come these. at Yes, stuff pressures eventually, done correct. in to up good as that. there that's coming job year-end -- start and renew,

So kind of all through. pressures coming those wage are

situation which and as there doing we're rises we growth, possible, going forward. be prior in in that can Obviously, to So keep to much those will contained trying sequential we haven't quarters. we see as the move is as seen but this best these

Backer comes today question next of Our from Sidoti. Marla

So rising, seeing at be your we're that given given will economy, interest of rates to terms circular shifts the the purchasers, also other trends that believe rising in the interest trends, space, but but the you've the inflation with macroeconomic you pawn in are seeing customer alluded and trends base, shifts not you in sustainable?

for a sustainable think Thanks do retailing. trend it's secondhand I question. Look, the in goods

the shoes, clothing, younger with that And for think on handbag, new. given challenging are is people And deal to thrift I goods, actually than better demographic shop macro and it's think, deal. a buying more customers before, because I looking get shops, attracted looking to discussed think to environment. inflationary are environment shops, our good secondhand economy, in this in I pressure the particularly pawn very luxury we've for people a as

grows, So top well as coming coming as very, environment be Tim But well for are secondhand his as we inventory. line positioned very pressure demographic think said pressure, I see growth as focused that the margins. as the Tim It's turning sales, I there. remarks, under inventory result, here for margins our see, on in on through, so younger will we you'll because And sustained sustained goods. really does quickly. think But said, as some our we're the that PLO your a in think margins -- demand think this I will the macro I just

no There questions time. at further this are

So back the management I'd to like to hand team.

for Thank Look, you, thank this everyone we us morning. joining operator.

shareholders As Thanks. And these great for proud talk soon. our proud of very our and their to a I've I said of customers earlier, quarter. we're results. you We're our We'll consistency. thank team,

today. This Thank concludes the you. call

You lines. may now your disconnect