FCFS cashes in on Mexico

Pawn shop operator and payday lender First Cash Financial Services (FCFS) posted a 42% increase profits, helped by higher revenue from its Mexico pawn operations, and reaffirmed its 2009 profit outlook.

U.S. payday loan revenue fell 10% for the quarter and the company is investing more in their pawn operations as stricter regulations and rising unemployment make payday loans less attractive.

Pawn revenue from its Mexico operations rose 31% to $40.2 million and U.S. pawn revenue rose 4% to $30.1 million. Because access to consumer finance is limited in Mexico, the country has a huge market for pawn lending. In addition, Mexico’s culture is more accepting of these types of lending arrangements than the U.S. The company said it is on pace to meet its target of 55 to 60 new store openings in Mexico during 2009.

First Cash’s older and more mature network of operations in Mexico allows them to capture more growth than their competitors. Management expects the new and existing store base in Mexico to be a strong source of revenue and profit growth for years to come.
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Peter J. Lazaroff