First Cash Financial 2Q profit slips, beats view

For the period ended June 30, the company reported income of $6.7 million, or 23 cents per share, compared with $8.9 million, or 27 cents per share, in the year-ago period.

Revenue rose 17 percent to $105.9 million from $90.6 million in the second quarter of last year. Revenue was boosted by sales at the company's Mexico operations, which increased 47 percent to $34.3 million.

The results were better than analysts' average estimates for profit of 22 cents per share on sales of $102.2 milion, according to a Thomson Financial poll.

Same-store sales increased 19 percent during the quarter. Same-store sales is a key retail metric that measures sales in stores open at least a year.

The company's car dealership business, Auto Master, incurred a store-level loss of 3 cents per share. Revenue for the division was essentially flat with the prior-year quarter's results, at $26.4 million.

First Cash Financial said actions have been taken that should reduce store-level losses to 1 cent per share or break-even in the third quarter, and that the segment should be profitable again during the fourth quarter.

The division has struggled with customers missing payments on their loans, and as a result has focused on implementing more rigid underwriting standards, requiring larger down payments from certain customers and selling higher quality cars.

Total expenses increased 18 percent to $41.1 million.

First Cash Financial operates 495 stores in 13 states and Mexico.