News Column

First Cash shares tumble 10 percent on lower 2014 outlook

January 28, 2014

By Jim Fuquay, Fort Worth Star-Telegram

Jan. 28 -- Arlington -based First Cash Financial Services saw its shares fall 10 percent in Tuesday after reporting lackluster fourth-quarter earnings and a 2014 outlook that fell well short of Wall Street expectations. The operator of U.S. and Mexican pawn shops and other lending services said it earned $24.8 million in the quarter, or 84 cents a share. That was a bit below Wall Street expectations. But its profit guidance for 2014 of between $3 and $3.15 a share compared to financial analysts' consensus estimate of $3.38 a share. First Cash's shares (ticker: FCFS) lost 10.3 percent of their value, closing at $49.82 , down $5.70 , in active trading on the Nasdaq exchange. The 2013 results were affected by the cost of closing 37 check-cashing and payday loan locations at Texas convenience stories, a move launched in December and that will continue over the next six months, First Cash said. In a prepared release, CEO Rick Wessel said that "regulatory and competitive pressures, especially in Texas ," led to the decision to reduce exposure to payday loans. He said revenues from payday lending were expected to fall to less than 5 percent of revenue in 2014, compared to less than 7 percent in 2013. Earlier this month, Fort Worth -based Cash America also said it was closing a number of Texas payday loan locations, citing laws in a number of major cities in Texas that restrict their operations. First Cash also said lower gold prices will continue to hurt scrap jewelry sales as well as the volume of pawn loans secured by gold. Offsetting those negatives is growth in U.S. and Mexico pawn operations, expected to rise 15 to 18 percent in 2014, compared to 25 percent growth in 2013. The company said it expects to open 75 to 85 stores this year. It finished 2013 with 906 stores in 12 U.S. states and 26 Mexican states, including 112 stores added last year. Jim Fuquay , 817-390-7552 Twitter: @jimfuquay ___ (c)2014 the Fort Worth Star-Telegram Visit the Fort Worth Star-Telegram at Distributed by MCT Information Services

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Source: Fort Worth Star-Telegram (TX)

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