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H&R Block - A Must-Watch Stock

hrb june12 lt

Overall tax return volume growth, and improving client trajectory are driving this global consumer tax service provider H&R Block Inc. (HRB) on track to deliver revenue growth and margins consistent with its prior outlook.

Despite claims by President Trump that his administration's plans for tax simplification will be bad for H&R Block, the tax-preparation company posted a 2.6% growth in U.S. tax return volume. According to CNN, President Trump declared that his dream is to put the tax preparation company out of business with a simplified tax code.

For fiscal year 2018 through April 19, 19.9 million returns were prepared by or through H&R Block in the U.S., a 2.6% increase over fiscal year 2017.

DIY online returns rose 10.4%, driving overall DIY growth of 7.9%, reflecting continued product improvements, enhanced partnerships, the H&R Block More Zero promotion, and new self-employed offering. Additionally, net average charge increased due to favorable mix.

Assisted returns edged down 0.6% for fiscal 2018, which compares favorably to the 2.5% decline for fiscal year 2017. The company also reported an increase in net average charge, which was in line with expectations. The improvement in Assisted resulted from the company's strong promotional offerings which included an enhanced Refund Advance no-interest loan, Free Federal 1040EZ offer, and Half Off promotion.

"Our goal this fiscal year was to continue improving our client trajectory, which we achieved, with growth in DIY and improved performance in Assisted," said Jeff Jones, H&R Block's president and chief executive officer.

The company now expects its fiscal year effective tax rate to be in the range of 6% - 9%, and for fiscal '19 and beyond, HRB's effective tax rate is expected to be in the 23% - 25% range.

H&R Block is slated to report its fourth-quarter results after the bell on Tuesday, June 12, 2018, with Wall Street analysts estimating earnings of $5.27 per share on revenue of $2.34 billion for the quarter.

Year-Ago Numbers:

* Revenues - $2.33 bln
* Net income from cont. ops. - $786.6 mln
* EPS from cont. ops. - $3.76
* Adj. Income from cont. ops. - $787.0 mln
* Adj. EPS - $3.76


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