EZCORP (EZPW) 1 Feb 242024 Q1 Earnings call transcript

Good morning, ladies and gentlemen. Welcome to the EZCORP First Fiscal Quarter 2024 Earnings Call. [Operator Instructions] As a reminder, this call may be recorded. I'd now like to turn the conference over to Jean Marie Young, Investor Relations with Three Part Advisers. Please go ahead, Jean.

Thank you, and good morning, everyone.

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

this for as company's begin, call the may certain on or company's we differ I'd a the expectations. factors materially and Commission. those to These regarding Securities everyone Before future financial statements operating Actual performance based current like in to risks forward-looking statements results and expressed as and periods. filed discussed number presentation the are periods that well expected slides of future quarterly contain remind conference other other for that due Exchange annual, with from our reports are the

unless an foreign presented otherwise identified, noted as discrete and And results adjusted effect of to and on remove currency the fluctuations items. other in our materials basis are presentation

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

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

Jean, Total revenue everyone. Thanks, quarter. in million the was an $XXX the We XXXX highest with and began history. of outstanding fiscal morning, company's good

on Our to net Bottom million, XXXX. very income grew highest to strongly with QX XX% quarter line PLO also up grow, PLO first continues ever. $XX our

Beginning on X. Slide

their be X seek leader another We short-term satisfy pawn as challenge stores stores retail. for We this demand in pressure for and The are operate a a increasing in added with preowned inflationary quarter. global environment cash X,XXX America, needs. our Latin the broking pawn and consumers to continues having the recycled customer U.S. base, macroeconomic to and

also to purchasing way environmentally through industry-leading by to provide to innovation. our seek which shop. consumers addition, preowned more merchandise strive value responsible and continuous experience customers an We a In represents jewelry,

quarter in as Moving in driving with strong was Record-setting X. December, first de assets the of well typically during in receiving store opened XX% PLO comparing Texas impacted to quarter, sales, increase stores on PSC. QX downward a in America applying earning million balances. up additional in consumers PLO the are novo XX%, America the quarter. When We as fourth holiday Latin acquired Latin inventory and balance pressure by X X lowering compensation Slide $XXX.X

balance $XX to Our cash and in repurchases store partially inflows SMG acquisitions was to inventory, We primarily of share $XXX million, investments, million cash acquisitions. up to Founders offset operating strong activities, PLO million fund in increased and repurchased due invested from America. by shares $X strategic and Central new

excellent X%, total our merchandise the consumer revenues up XX%. excellent sales with and Strong PSC and adjusted XX% EBITDA respectively. XX%, XX% up financial for and Slide metrics quarter, continues XX%, to up X propel demand PLO service up up shows gross customer profit and

Slide QX X. strategies on our Turning for business to key

We continue the core to people investing in strengthen and quarter, during pawn technology. operations our

In pricing almost QX, to rewards customer we our passion. evenly between people, of theme pricing, globally, addition drive tagging, faster to times better launching to a X.X point-of-sale members continue systems service. and to upgrade rebuild capabilities system of deliver grew EZ+ transaction e-commerce and intelligent merchandising, transacting Latin X%. Team operating Across at geographies, million America. split and all are million in of increased core X.X U.S. with members transacting the pawn the globally, people and customers

of $X.X $XX.X and career Workday committed the Houston. globally the save team payments XX Human stores our initiatives, in retention we features giveaways, capital over which to these and are positive on in of million implemented promotional will attracted launched engagement users, enhancements. Online to and X. data highly app online payment Online reflecting reception training, improve growth are payments launched Mexico in-store We additional access XX% pickup capabilities and with during Management card ensure recruitment, processes. Innovation the million remains future. online, Furthermore, from buy We adoption our development e-commerce investing that with Max was critical U.S. to to human to enhance expanding incentivization quarter Luxury enhanced system to the eBay. Slide and securely to details recruitment grew in in and further successful Capital The our Pawn engaged.

the X.X During in customers critical local general the services we quarter, items we financial sold communities merchandise million and to which jewelry pre-owned and serve. provided of in hundreds

conversations promoting round to the food diversity inaugural enhancing and diversity. included diverse groups values more. local charitable the an excited recognized that U.S. awareness, by donating and all, in Newsweek and affinity security, workforce. At inclusive large of recognized encouraging and launched We of and EZCORP poverty top America, support districts in greatest that giving, midsized intervention. U.S. employees This an are workplaces initiatives foster we to that financial their inclusion EZCORP, or young which for to highlights eradicating diversity, engaging environment supporting Latin share X people for literacy, organizations for a with empowering We America's as companies study dedication development

we working system members, circular improve company with innovations platforms, program. We digital and addition, promote to our of our more we the banks. The productive, POS food loyalty experience and proprietary shopping volunteer is affordable, for In a their with our always passionate, local in sustainable continue to tenured ways to economy find hosted customers, at their experience backbone and the experience. enhance events company-sponsored committed team

over details I'd Tim now results. like Jugmans, financial CFO, to Tim? turn on to more our our the provide to call

highest increased which the GM X strong Aged same-store in at inventory keeping increased we've growth up PLO year, Lachie. period with new financial by driven up flat sales to is on revenue X% gross X.Xx due Merchandise sales stores. for details $XXX.X profit with inventory GM up XX% turnover with low. PSC focused Merchandise to turnover first was and X.X%. EZCORP million. quarter. at Inventory PLO $XXX.X consolidated growth at Slide margins Aged over Thanks, increased sales X% quarter last XX% were year-over-year was was million, up the results ended history. the our first a basis, on and as

a It was increase X% $XX.X solid with million, EBITDA expenses. offset another driven PSC, in of quarter XX%, by by up consolidated higher

U.S. revenues were in our the assets growth. and continues service XX% Slide drive which Earning million, history. Turning which pawn XX% up drives Pawn PLO, to increased turn our an to $XXX.X excellent driven XX%, highest increase in inventory inventory. segment XX. customer of in X% is PLO and on by Total demand Strong to in

in Inventory loan merchandise basis grown general count up also an driven increase X% category, the due drove store to with to store which is Our PLO points, on continued in U.S. is and XXX quarter. shoes handbag, X basis this XXX acquired up focus the composition stores, competition jewelry operational XXX has size. by in tools. average points increase

XX% year-over-year. XX% growth PLO increase PSC drove of of the

side pawn by a quarter sales the in expenses. million, X%, XX% higher EBITDA were On gross the margins. of X% in up the increase up with merchandise business, sales the PSC, for sales merchandise with profit U.S. a due up merchandise was retail XXX-basis-point partially drop a offset from X%, $XX.X to year prior

down XX% history. Turning highest XX. which to for Slide was American driven X% inventory by increase by of our $XX.X in Latin an quarter up X%, pawn segment the to assets XX%. offset PLO, increased the Earning our were Total first on million, revenues

with PLO size America on category, in X XXX driven Mexico. increased in jewelry basis increase to is by X%. this points, operational composition by This count especially growing up an average stores has store Latin composition quarter jewelry X has the Our loan focus countries. also in XXX in up

driven pawn year-over-year, PSC by both PLO continued growth and was up PLO due to X% stores. strong XX% rose demand. improved and new operational performance same-store

by quarter was profit On $XX.X sales up merchandise due sales the XX% higher PSC the in up XXX-basis-point XX%, retail partially sales and side of count minimum due EBITDA the increase expense million, XX% a in on gross year margin. in the increase to higher labor prior up was improvement the wage to for addition headcount, and business, rent. by X% merchandise to offset in store The a primarily expenses. increase was driven with

on we a see PSC forward, should to following a on seasonal basis, basis PLO consolidated suit. with continue Looking grow

turnover inventory aged merchandise. We limiting and general continue on to focus strong

remain vacancies management, our to a expenses While primarily on ongoing due we to see committed to in sequential basis inflationary stores. filling and we expense expect increase pressures

quality business. I closing remarks. few growing service financial drive enhanced integration strong in and should to for customer PLO, will management, inventory now our turn on a focus Lachie Our seamless it results continue optimizing to over

sales Thanks, highly and closing, operating highest ever, thank our team I EZCORP PLO Tim. financial results any In company's merchandise balance We history. is in in made is of to the quarter stakeholders. any than for robust. want and our first quarter revenue sheet for delivering at more level quarter and outstanding our more total the for an

excellent start year. And to that, will value XXXX, of for call our questions. also look in We Operator? our buying shares. while we back remainder It's all with an and team the driving continue technology, been the for open of invest the forward and enhanced for shareholders we to to

[Operator Ibrahim Jefferies. question Instructions] Our comes Kargbo from with first

hear you Can me? guys

you, got Ibrahim. Yes,

maybe My about with the you follow-up. question costs a was and have is, the do I if transition. progress could the associated wondering Workday talk I

human Sure. on all strategic it's with information. And the bunch quarter, people just rewards, gives more gives to resources. of resources resources. to through It's It human things the sorts Look, starting modules better we part. let's a on on much our with do redefining look, start company-wide of with all much -- It platform. a access launched incentivization

is that? you certainly cost, So do it company -- platform. of Tim, a to sort With walk internally want a really respect redefining a to company-redefining through

Sure.

over implementation. So be is this going process X of to years

will finance ongoing 'XX, and there and this it year. launched offset maintenance FY in will double going year part launched come and some periods. double make will financial of that, the this like down. the be year. higher will some running process items, HR So that to calculating slated There part, items which on some do work cost are continue a going We've slightly have able some costs through we'll also we in in all systems. through in things those will year still Workday where which be implementing the on be last this to There and we're costs future be successfully to We're of be but share both

color guys on maintained throughout the wanted that some fiscal follow-up improvement. efficiency that. will just you be this I more so I Do year? My increased, was turnover Great. believe on see is

you that to one? Tim, want take

and X are sell ability provides -- quarter and then through Valentine's definitely, holiday strategies. X with quarters a our the definitely season, X definitely during and sales efficient quarter the Yes, most season, the clearer tax to quarter

numbers we So than to did on keep year, but those a not sequential we attempting necessarily higher basis. turnover are last

Callinan Canaccord question with next from [Operator Genuity. Instructions] Our comes Madison

This is Madison Callinan McNamara. on for Brian

you work can our store hear check -- for me? First,

Yes. good. All

Okay.

internal expectations, check look December So your and work, for came store actual a merchandise below results but that in sales we bit better. January in much found

If it's performance, of you else? talk what's there? you this is on about a or that And try something expectations to if going as could internal record-breaking function high continue

do Thanks, -- high Madison. internally yes, the to we The grow have about so business. expectations continuing

are hit those And and incentivizing expectations higher hit so in the our targets -- to and the in a our to and those spoils. them stores little really stores, continue share those of that's stores targets bit many

So great it's been to see.

that happened definitely we to you of and numbers our last these really and somebody of teams about what number year. So not continue encouraging some present. way those record been are It's thinking -- that they're a internally, great hit their that's budget ask to when

in, depends the high I And we on met really strong it's really to but It expectations. store merchandise remarks, quarter. expectations, that, manager sales highest We our ever whole, quarter. what add in you're we the as said Madison, To you're had been think what asking, those it's year-on-year. region a on growth strong

pleased really how gone the we're regions. first across quarter selling with So the in all has

could one. And if Awesome. I ask then another

of For versus that additional the appreciate on of be rewards disclosures we us or in any X/X Rewards additional the give great. quarter. color specifically the million you enrollment, members X.X million engagement, can really last Did that year? proportion transacted that EZ+ on the would X.X improve the Or

the know you to Tim, that? answer

percentage get a number back of one. The have to is transacting From you that customers we'll basis, on to improving. Yes.

the more just give you in problem. me. faces X for on Are stores? And seeing what categories a are No us little Can outperforming? color you new

also it's a segments, that the definitely Obviously, from stores. why composition which and category last handbag talked It's and increased. been you traffic into grow, has has seeing been shoe the in all driving our jewelry average months though overall PLO XX in the about perspective, to section. perspective, good way continue of a is number we've -- our over drug From luxury size especially quarters small, an a across of as growing loan fees shown

strategy Latin particularly it's teams store jewelry the where deliberate side, -- is, big that how teaching particularly in been opportunity It's the category America, an in we're Madison, really on Mexico. a

strong that a So we've high growth we've U.S., And category. expectations really in got America in category Latin seen for such given the it's going big forward.

[Operator of Instructions] And line from Callinan Canaccord Madison follow-up the have a we Genuity. with

you've season, tax think think don't exiting both tax a How since this should we had So XXXX. normal we balances season? about PLO and season entering like

The there's going season is if be to much, won't, say well. they really The wait probably tax definitely far see going -- which depends year little we'll get on it to switches balances to balances. to tax if going sell paid how this down but to the then to season nothing down. be also paid get see. more you're in we the like a normal normal PLO that that interesting bit as And back had don't a ability -- we've pay it there's those XXXX, and downs It of

season, So quarter loan I on us through side well customer really our think to -- how tax revenue the the and to buy, X our on during our but help that on to discounted much be return. is to business, up in how go the goods going allows getting to back get the going is customer, ability tax quite is made that both dependent

then Awesome. on year G&A can XXXX, you XXXX? the for up any and after give additional color And expenses catch store in

we we definitely -- sequential on expected under see a definitely quarter. this do We what were increasing expenses, those store basis. The

it keep mandated minimum benefit to in other Some America of of increases wage causing going some inflationary, the Latin some the it with government and increases effects through. of

for from question last your buybacks share questions longer then How just about getting should term? And Founders we investment Awesome. We're me. think about investors. in

largest the the it's a third now high-performing Founders region. -- chain is pawnbroking the American Look, business. in North It's

which So it's what is very, hoped. very quickly we'd become quite a force,

with better is in happy exciting. which that quarter have we're we So than producing They expected. very returns America, this even investment. bought stores It's Central

about. acquisition So XX with to our very stores. we could are about term obviously forward a the they're spoken structure of source that growth and investors it But we already really now at long be happy is shareholders. it's we've potential think going that The high way for a

performance. happy the team, really with with we're So their

ultimately a in we to we'd for they're growth for prove to And acquisition and said, potentially. be invested. returns a exciting I than better As delivering great But us what their are expected now, when think for investment it's I could us. very there we support them plans,

every We the side, but buy to very and we buybacks. done with another our own every On is assess cheap. listen investment. on to We this that quarter, consistently stock buyback very our shareholders, share share obviously, obviously, as stock. growth trying balance it quarter, continue back we very, believe to across We've that we see return good we're and

with which back that operate. think just even we we really in in we have buying the balancing significant are we that regions so the opportunities And growth

a So and a balance up back we're base our our return investment flows scaling on growth see strike trying and what stock. between buying with good in to as store we cash

balance So those hopefully, great is with with message are growth an start and year, had we consistent consistent outstanding But trying share we've very and across the been a buybacks. to that to we've quarter, the phenomenal quarters. opportunities news

this back concludes remarks. time, Given question-and-answer would the I turn closing the At to That Lachie for to session. call like

our Thank team. you, for everyone, joining to thank you, operator. and you today, Thank

this outstanding of to an to looking operating I rest the we're shareholders, for this and forward and results year path. think they our continue have really of quarter of on financial produced all

joining the for you everyone, through speak course the thanks, and today, of we'll Thanks. to day. So

for does participation you conference. in Thank your This the today's conclude program.

You may now disconnect.