First Cash shares tumble 10% on lower 2014 outlook

Arlington-based First Cash Financial Services saw its shares fall 10 percent Tuesday after it reported lackluster fourth-quarter earnings and a 2014 outlook that fell well short of Wall Street expectations.

The operator of U.S. and Mexican pawnshops 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 was $3 to $3.15 a share, compared with analysts’ consensus estimate of $3.38.

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.

The 2013 results were affected by the cost of closing 37 check-cashing and payday loan locations at Texas convenience stores, a move launched in December that will continue over the next six months, First Cash said.

In a prepared release, CEO Rick Wessel said “regulatory and competitive pressures, especially in Texas,” led to the decision to reduce exposure to payday loans. He said payday lending was expected to fall to less than 5 percent of revenue in 2014, compared with less than 7 percent in 2013.

Earlier this month, Fort Worth-based Cash America said it was closing a number of Texas payday loan locations, citing ordinances in major cities 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 with 25 percent 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 added last year.