Earnings call transcript Q3 2023

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Operator

Good morning, ladies and gentlemen and welcome to the EZCORP Third Quarter Fiscal 2023 Earnings Call. [Operator Instructions] As a reminder, this call may be recorded.

I would now like to turn the conference over to Jeff Elliott, Investor Relations with Three Part Advisors. Please go ahead, Jeff.

Jeff Elliott

Thank you and good morning, everyone.

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

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

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

EZCORP's over the and the now on call today Tim call Given. Chief us like Financial Jugmans, Given; Joining Executive I'd to Lachie? Officer. are Officer, Lachie turn Lachie to Chief

Lachlan Given

Thank everyone. you, morning, and Tim good

an inventory XX sales of volumes with $XXX.X remained over the of persistent X.Xx. of of on sales GM hit hit strong revenue was basis. yielded GM all up same-store within current driven XX% our range plan a a X-year by quarter, our team's in QX up record for across executing were for X% for basis. operational targeted same-store again the Total total Our turns results strong points all-time of of record new and X% $XXX.X XX% regions. Pawn X.X% XX% at showing inventory on PSC gross loans our as for a quarter stakeholders. improvement Merchandise outstanding higher quarter, Aged and QX. basis our financial excellence Merchandise million, a inventory sales margins pursuit million, the

X. Slide Beginning on

America, money We challenge most as our their having global The cash a shop. continues retail. stores this we through stores provide the added recycled as as short-term Latin quarter. leader be products base We consumers the broking another and macroeconomic in strive to in more communities value positively which for experience We a U.S. customer are represent X,XXX the seek operate to responsible continuous and XX which environmentally secondhand for a pawn our environment pre-owned way in impacting best, satisfy and needs to environment also while convenient innovation, the serve. consumers and well to for

X. to on Moving Slide

Our engaged. system investing incentivization engaged team team to financial and with members are underserved inclusion sell providing our pawn communities item and of service our an drives POS and program our our instant in to differentiated customers success, so for buy, recruitment, offering, committed ensure digital and retention are we footprint, and for platform, customer We proprietary store loyalty We provide promote well-positioned for innovative customers. attractive any value. cash outstanding

robust significant X-year novo the in strong progression to committed and to motivate a find industry tenured have and pipeline We acquisitions believe new program. continue from a and to continues stores, liquid strategic the shows ways that retain passionate, productive got on our and our Slide we've team X them. goals. we most We fund the very what assets, opportunistic of share sheet, build-out enabling in to growth our us de be our repurchase balance earning and engage,

will last XX% X,XXX across points and whole. as year of XX points members company-wide further HR in industry. improve the survey scorecard above engagement our The X industry The a serves jump of of transforming year, a we over this and record and implementation with our as culture X organization how our financial services the efforts the scored benchmarks, are team a including the ERP of participation annual driving members quarter a team that greater and global results efficiencies X-point our this retail for evident being XX systems of is the Workday points, the above above and processes, points finance from

program to XX% X.X grown marketing drive extremely to Our campaigns been customers, well growth. experience strive customer received personalized has We increase and loyalty sequentially. and with better points-based deliver has up business engagement communications to million and

XX%, for the X. for QX X%. improved associated XX%, increase up increasing quarter PSC. up on earnings XX% all-time PLO key of but and our sequentially million hit to million, which an with points. up basis was sheet QX. record was the a PLO, came XX EBITDA of Turning slightly $XXX.X $XX Inventory million, primarily strong significant in most turnover with remained financial sales revenue slightly year-over-year on of by quarter, Adjusted down in increases a inventory Cash basis, $XXX.X Merchandise for XX% balance due The revenue themes on to were the sequential resulting for and aged total Slide up high driver an in inventory.

X, months XXXX. last ending June On in EBITDA for XX% versus XX ending the the Slide last months was XX% XXXX XX margin June

As Last earnings. the people launched to focused down closer bringing information get inflationary recently order a margin, on due investing operations, we last expenses. increased driving with that levels we inventory aged access our execution are pleased progress quarter, and LatAm and we better communications to on decreased that efficiencies. and U.S. to we technology that quarter, the impact to core drive that about is on In to said in we our enhanced were front. provides intranet the and discussed X, LatAm, EBITDA in as has strengthening talk On new expected, Slide in

and our toolkit modern cloud passion. an we've Investing of with U.S. with strategy both help members technology, in our We've Workday better reimagined a build people, to also to employee people pillars pawn experience. application align team provide an engaged our to philanthropic and enhanced a for launched enterprise

customer experience. We better e-commerce deliver pawn faster and continue to upgrade and to transaction drive pricing, capabilities times

our innovation X, growth and pillar. Slide On third strategic is

online to $X.X over sequential a reward quarter, showing the versus XX%. encourage has their increase collected million engagement. customers In status Program the X% stores. of last We of our we million grew Loyalty showing payments to further giving and notify staff XX% a more of in time comprised quarter, total campaigns personalized EZ+ marketing increase. Our sequentially points versus extension, X.X significantly U.S. $XX.X launched over serve XX% in store $XX.X last enrolled Online million U.S., now and members million extensions customers to in

our and experience in XX Latin Guatemala. in de pick websites, strategy. Mexico Vegas in online store and with remains customer opened customer grew up America key Pawn customers, extensions luxury increased store. daily buy stores X the Improving websites, and in U.S. de U.S. visits We X to online online to layaway. U.S. the test X transacting global visits Max to growing base the opened Las In novo we novo We area, pawn

Slide third XX outlines the for our quarter. fiscal ESG highlights

and recycled a phones, X.X the circular the computers, of instruments, electronics, TVs such tools, resold toxic economy have neighborhood and jewelry. pre-owned a component million and as household items well in as and as local musical compelling are We over quarter, including consumer goods

those group, regulated advocacy and are leadership Importantly, by for and we provide have are Diversity an HOLA, U.S. significant underserved inclusion sources. essential, fifth introduced traditional focus transparent who affinity financial in the resource our Hispanic a and the simple, organization for

local mission life and where the have stability. in financial quality strategies giving have security revamped food live at and Foundation financial in operate we of the We supporting aimed EZCORP the communities the the of improving U.S. literacy, launched through and

like would financial over details more the I results. Officer, our Tim? call Chief now to Financial Jugmans, our turn on Tim to provide to

Timothy Jugmans

sales on third a was X.Xx. up and year, results results. by $XXX.X at acquisitions. increased over for margin strong to with gross financial turnover consolidated our million, Aged on was in details revenue history. driven decrease. sales at XXX-basis XX by highest year-over-year due is EZCORP which PLO offset a our period improvement quarter. the XX% a X% the ended the GM basis growth the up Merchandise Slide profit XX% Lachie. second last inventory increased X.X% point sales million, over same-store PSC Thanks, up Inventory sales is quarter. X% growth PLO up to was which both quarter same-store basis, point is XX-basis a third highest was Merchandise XX% $XXX.X

in million, this GM consolidated quarter It successful and aged of lower. was solid working been improvements up with X%. drive U.S. $XX have We LatAm EBITDA to another on

XX% Turning up driven to growth. driving our Pawn higher U.S. PLO average XX%, year-over-year, operations on PSC primarily XX. PLO Slide rose by

higher million, in X%, increased sales loyalty store with with retail margin. the PSC to to store program. due and up on activity, related the a up $XX.X drop expenses On up offset expenses side higher XXX labor the of U.S. lesser quarter business, increased sales extent, with prior merchandise year line were profit Store merchandise gross by primarily point to to our Pawn expenses. basis in an due XX%, EBITDA X% partially by expected for the count sales was X%

average change to focuses XX% the Pawn Slide to American by on quarter. XX pay in on Mexican year, was to Last PLO law there but our be May basis, to grew to by employees up paid PLO the primarily during PSC a same-store higher X% share led PLO XX increased was for which operations. due due paydown. downs a down profit the quarter X% Latin this increased companies Segment and yield. which

higher inflation showing points. in GM sales gross increased at increases XX% Latin XX% point to margins turnover sales were basis, up linked sales to basis. QX improving due Inventory XXX XX%, basis up and same-store Merchandise XX-basis and to to X% count. aged and execution Store an expenses XX% were X.Xx on due mainly at same-store up over store up rent Merchandise on a with improvement X.X%, strong remained profit due was America. a

million, For by to partially expenses. higher offset the Pawn EBITDA to primarily XX% Latin by due increased improved American $X.X profit, gross quarter, third

consolidated the well PSC of Looking we This see hit should year. as forward, also that build numbers means levels also to grow as to as financial a sequentially. year-over-year basis, the record will on continue PLO we end

quarter, As targeted aged on remain as communicated do the general range sequential to we've of seen a XX% inflationary on lower in this limited continue pressures inventory prior affect likely and remain expenses business. store will XX% quarters, have our the to and of continue basis gross margin we so will strong focused see merchandise. end times increased as Also, to and at we

to same expenses sequentially the G&A expect also reason. We for increase

what gain to selling to PLO, continues growing improving financial and and investing results. technology on in drive efficiencies service our own we enhance focus customer Our

now to a comments. for Lachie few turn I closing over will it

Lachlan Given

EZCORP closing, I our In team want Tim. quarter. for thank Thanks, another outstanding yet to

We are consistently results our delivering strong operating stakeholders. for and financial

Our to level grew the in exciting is history and We new quarter. opened stores PLO highest XX balance this robust. sheet our

and our team continue while invest We to back technology shares. in buying

our the of responsible in committed to employees improving our experience are environmentally customers way. and We an

significant very and much a plan Our for to and the next the we financial have executed shareholders and it produced producing are X-year for who our beyond. looking and results years better X very company operating people forward turnaround have over our even

for that, we with Operator? will open the call questions. And

Operator

[Operator is Instructions] Brian Our first from question Genuity. Canaccord McNamara from

Brian McNamara

results. Congrats strong on A for the me. couple

apparently Search a nearly First curious high. July, stores? off, for I in reached in pawn mean, the you're near per shop you're a not regular trends seeing for your record guess, searching I you're presumably, pawn pawn shop Google se. what shop if me, I'm

you seeing be like it kind into new be inflation whether helpful. would difficulty, customers color driving of customers? And are So you on be your guys financial really what would stores, any your

Lachlan Given

very until that digital July years our really Look, environment macroeconomic on this Brian. in trying we're as now we've the customers. very We've website has to put seeing invested strong. In us had of announcement, trends in up we be strong stores customers this for piece saw the Thanks, the last the very, very, and even been tough continues online. couple to themselves, of find activity

seeing growth in online. we're in both stores the So absolutely and customers,

and in continue significant doing think our here, So trends about look, some from see we've the of all I as you spoken numbers are momentum. that quarterly can results the recent quarters

Brian McNamara

kind record as then you guided of and highs. to continuing reach to PLO, think And about obviously, you've

fiscal you Should to X.Xx kind Or the at out range go next high as shaping rate move of PLO, targeted your Any out X.Xx at expect PLO and range. X.Xx obviously, kind into on higher? inventory I where kind target color there? that we of of your to end of your kind we're was at of see year. we think max the

Lachlan Given

you want deal with one? do that Tim, to

Timothy Jugmans

Yes.

in to demand record QX want to hitting the say to talking we there's -- balance. continued PLO be at we of And The growth expect we that it strong. happens going numbers continue continue expect We're we as in unless So strange still the economy, well. to to demand the PLO is something end about grow.

Lachlan Given

on question And the -- the and PLO. answer inventory, the ratio the the what on about to on

Timothy Jugmans

bit do around X.Xx expect -- the ratio, in a stay yes, stay. we move seasonality around it It do will that on X.Xx the little but to it to expect we On that range. to depending

like definitely a sell are going there's those selling definitely the QX. lot QX show inventory to different going As in to quarters than QX quarters in QX we're that and and more

Brian McNamara

gone next kind And as then like year this kind your improve there's in number. sequentially window business. out to of continue clearly year of you PLO? into settle Is seasonality for kind that that the expectation Is more seasonality you the that impressive of

Lachlan Given

wasn't tax just all I this year big paydown lending thing the mean think same all the the of And was happened PLO, companies saw lack in us. read that you It the season. thing. I

for But with is little I see the probably would different and things it's that's going big to year. think season. rotate but unusual normal they're about going rather a generally, various what look, tax a commentators seasonality. I get big expect So is we'll seasonal that to a are to in factor But business next saying than back closer swing continuing one. into that this

Operator

question Oppenheimer. Brian from comes Nagel next Our from

Andrew Chasanoff

Chasanoff Andrew Brian for on Nagel. is This

of So you you bit the bit of Do takes in I push puts know margin. to drove the other follow-up. remarks the that can start that expect over boundary? that the closer should be the further bit discuss quarters? the lower you just, again, little next I margin Can wanted a remain to but levels a XX% And just margins little to might factors just a said the with at merchandising then to these quarter you pressures these a discuss and QX And below range. prepared XX% further? several in the end XX% considering we that external little

Lachlan Given

run but what specifics we out starts I the the that. loan that difficult. environment that puts counter I note the of macroeconomic at be think answer is and a Tim continues to to think here to inventory on important of we And the will everyone it's think calls critical I falls do. for flushing And margin but business

as make wanting quickly can. we're think put we I are puts sure on to So we as just And that -- naturally can inventory that pressure flushing margin.

Tim, takes helpful in with further in increases. quarter. the think turns and any is that and So why answer we're on loan look, happy margin I balance pretty piece driving very this But don't you puts

Timothy Jugmans

sequential So margin every the the increased the in as store. had definitely counter negotiation I -- we look We've the basis has to see The think it's single at the here. to important down year-over-year margin more on have inventory come quarter. also a at continued

customer customer the they the so choice money And also has and to. used has less than more

bit factors those margin. of putting more combination a a the pressure little So are on

basis, down. You is age, also coming on see that sequential a general also merchandise

to that key pressure a is is we that of sure does margin. inventory some So continue inventory making balance, does it and on effect or it whether a factor put have -- not healthy ensuring our healthy

we're stores can make is to do On better think put significantly that it we that our in would on want even a it -- PSC I gross are our is money consumers our we customer either the below that to significant if our think the customers, little to do which sales make of on then ensure gross on depending that flex pricing the goods ensure that bit I times. your big worse on pressure there's And overall, line is to maximizing profit range? encourage what gross at put where led our got what that but those is or economy all purchase it to to here would go trying the will and would things question really we we the margin. have pressure the

changes. as So fact the have that quickly short-term we is aim. economy changes to And us that very the make the allows very loans

Operator

next Brian from Our Instructions] Canaccord. [Operator McNamara comes question from

Brian McNamara

all are share results I'm on your price. your kind know how But undervalued share seems could guys. with being the indication -- I'm as the Sorry today, through. frustrated you and of shining curious, you're for results hogging curious, your it if give here guys questions just view the it the are kind is like rewarded market not price. of right view you some of stock come through of I the in and

Lachlan Given

do our Yes. earn only Sure, to Brian. we think want ourselves compensation of And it not given I you're Look, frustrating, as but significant part stock. is of right, for well. all very all drive you for a shareholder value we in

I that and So do kind every think to much one and the quarter. plan drives team price doing years X drive the into And thing on we're is can strategic we I what our results X higher. are very years -- focused that financial of we're number almost that think single

So my undervalued. personal much, highly view where trading at than -- more it's very is It's it's worth today. it's much

fundamentally So pipeline and PLO. involved to fiscal where a scale are what for drive can can make do of are drive to our I a now. make return that. amount is good that conservative management We by getting strong hopefully, But here going way very grow I think in we people so think really we growth, do that remains The acquisitions. can liquid

of going we do to to would be some years, We've but due be not if debt got to. anything coming like the heap in able to in liquid or a that couple next whole cash we're

the doing are think I So right things. all we

market the are We trust. earning

meaning -- if I my will just We that, the higher is much, keep next stock the are proving up our that long doing be And term. acquisition personal we view strategy. in think much

Brian McNamara

expense in about Is do you the inflationary expect that fiscal that of think guys kind Tim quarters? of on impact fiscal 'XX How given the maybe inflationary Is kind Great. moving of to next tail on catch-up And base. expenses you one we of that event? when couple kind experienced this off? your the year? Like then another forward should have for

Jeff Elliott

-- We but have changes through. seen in America, -- We going in labor the don't through so this coming especially we've to we going 'XX. do some still in those be got We some costs. be still expect into rise that Latin see we got increasing to much laws, year there's as

we -- have that in are inflation. agreements, You to especially have America rental Latin linked

as we drive can -- on do not revenue really to bottom So ensure you just some, to continue even greater that growth see that will we to and ensuring focusing the great grow continue we're we line.

Operator

have We this time. no questions further at

that, I to will Given with So Lachlan final back hand for remarks.

Lachlan Given

you, Thank EZCORP for to talking and the everyone, tomorrow. forward outstanding you another look quarter. your appreciate team I to We Thanks, guys. call. thank really many of you for joining the to time. today And

Operator

for call. today's you your concludes This Thank participation.

now may lines. disconnect You your

EZCORP (EZPW) 3 Aug 232023 Q3 Earnings call transcript