EZCorp (EZPW) reported Q2 revenue that beat expectations, with a 10.5% year-over-year increase to $285.6 million. This was driven by a 14.4% increase in pawn loans outstanding, leading to a 15.2% rise in pawn-service charges. Additionally, merchandise and jewelry-scrapping sales also saw gains. Gross margin on sold merchandise remained within the targeted range, and adjusted earnings per share increased by 21.7%.
The challenging macro-economic environment increased demand from customers seeking short-term cash solutions, resulting in a Q2 record outstanding loan balance of $235.8 million for EZPW. The company also expanded its presence by adding 15 stores in Q2, including locations in Latin America and the U.S. The growth of EZPW’s points-based EZ+ Rewards program, which saw a 10% increase in enrolled customers, is expected to continue driving transactions across all regions.
Despite a 6% post-earnings stock decline, EZPW has a history of recovering from similar setbacks and reaching new highs. Analyst Julius Juenemann, CFA, remains bullish on EZPW’s performance going forward, as the company’s operating results are expected to continue impressing investors in the future. EZPW is a recommended stock in the Forbes Investor newsletter, which offers insights into undervalued gems with significant upside potential.
Overall, EZCorp’s strong Q2 performance, driven by increases in pawn loans and merchandise sales, demonstrates the company’s resilience in the face of economic challenges. The expansion of its store footprint and growth of its rewards program indicate a positive trajectory for EZPW’s future growth potential. Investors are advised to consider subscribing to the Forbes Investor newsletter for more recommendations on stocks like EZPW.
