First Cash Financial Services Inc.'s second-quarter net income slipped 4 percent on higher expenses and acquisition-related costs. The pawn store operator's adjusted results topped Wall Street's view, but revenue missed analysts' estimates.
For the period ended June 30, First Cash earned $15.7 million, or 53 cents per share. A year earlier the Arlington, Texas, company earned $16.3 million, or 56 cents per share.
Store operating expenses climbed to $44 million from $35 million, while interest expense rose to $633,000 from $176,000. Administrative expenses and depreciation and amortization expense also climbed.
Taking out 4 cents per share in one-time expenses tied to costs mostly associated with the $70 million acquisition of 19 Valu + Pawn stores in Texas, earnings were 57 cents per share.
Analysts surveyed by FactSet expected earnings of 56 cents per share.
Revenue increased 8 percent to $143.1 million from $132.4 million, but fell short of the $152 million Wall Street was looking for.
Retail merchandise sales at pawn stores rose 35 percent, with revenue from pawn fees up 27 percent.
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Revenue from pawn stores open at least a year, excluding wholesale jewelry scrapping, increased 15 percent. The figure climbed 22 percent in Mexico and rose 4 percent in the U.S.
Revenue from non-essential wholesale scrap jewelry operations slid 78 percent due to lower gold prices and a decision by First Cash Financial to hold onto a significant part of its scrap gold production rather than selling it at market prices.
Consolidated pawn loans climbed 27 percent to $112 million. Pawn loans in the U.S. rose 38 percent on acquisitions, while pawn loans in Mexico climbed 17 percent.
First Cash Financial added 33 large-format pawn store locations during the quarter. It had 299 total stores in the U.S. and 568 total stores in Mexico at quarter's end.
The company said Wednesday that it still expects fiscal 2013 earnings between $2.75 and $2.90 per share. Analysts predict earnings of $2.87 per share for the year.
First Cash Financial had lowered its full-year earnings forecast in June from its prior outlook of $3.10 to $3.24 per share due to falling gold prices and volatility in the Mexican peso.
Its shares finished at $50.37 on Tuesday.
