Founded in 1955 and headquartered in Kansas City, MO, H&R Block (
HRB - Free Report) is a global consumer tax services provider.
The company offers tax services through retail tax offices in the US, Canada and Australia, and its H&R Block at Home software and online solutions. It provides tax return preparation services with the help of professional tax preparers in approximately 12,000 company-owned and franchise retail tax offices worldwide, and through H&R Block tax software products.
H&R Block reported the results for its fourth-quarter FY 2018 ended Apr 30, on June 12. Adjusted earnings from continuing operations came in at $5.43 per share, beating the Zacks Consensus Estimate of $5.26.
Strong revenue growth drove results during the quarter.
The company announced that it is closing 400 U.S. offices as the new tax law makes tax filing simpler. They also said that they will increase their technology spending.
“We aren’t as relevant as we need to be to today’s consumer,”
said H&R Block CEO during a conference call with analysts. “By differentiating ourselves and demonstrating why we are the best choice for consumers, we will position H&R Block as a modern brand with momentum.” Estimates Slashed
Analysts have slashed their estimates significantly after quarterly results and store closure news. Zacks Consensus Estimates for the current and next year are down to $1.91 per share and $2.09 per share respectively, down from $2.38 each, before the results.
The stock plunged about 18% after the earnings and store closure report and is now down more than 6% this year.
While H&R Block’s results were better than expected, the company’s outlook is somewhat cloudy given recent tax law changes. It is better for investors to avoid this stock.
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