Reuters: H&R Block gains share in digital, to exit Walmart stores
Reuters News Service is reporting on H&R Block Inc., publishing the tax preparer’s statement that its market share continued to grow in the competitive digital tax filing business even as total tax returns fell in an "abnormal" U.S. tax season.
The Reuters report says:
“The biggest U.S. tax preparer also noted ’strong interest’ from prospective buyers for its H&R Block banking operation.
The company cut 350 jobs, shut about 200 stores, and overhauled its management last year to focus on the fast-growing and highly competitive digital tax preparation market after losing customers to do-it-yourself services such as Intuit Inc.'s TurboTax.
The company said it gained 50 basis points in market share in the online return category, in which it filed 4.9 million, or 11 percent more, returns in 2013 than the prior year.
The Internal Revenue Service (IRS) delayed the start of the tax filing season by eight days to Jan. 30 this year to account for the enactment of tax law changes made to resolve the so-called fiscal cliff.
H&R Block estimated total filings at the IRS during the 2013 tax season decreased 0.6 percent to 133 million returns. But its share of the total U.S. tax returns held steady, the company said.
In total, it filed 22.2 million returns for the year ended April 30, down about 1 percent from a year earlier.
H&R Block said last year it was looking to sell its banking operation to avoid a rise in costs associated with strict regulatory supervision under the Dodd-Frank Act.
‘Since we announced our decision to exit the bank, we have received strong and varied interest from prospective partners and that interest remains,’ Chief Financial Officer Greg Macfarlane said on a conference call with analysts.
The Kansas City, Missouri-based company also said it had decided not to renew its relationship with Wal-Mart Stores Inc. H&R Block operates out of about 300 Walmart stores during tax season.
Tax preparers usually set up outlets in department stores during that period to benefit from the heavy store traffic.
Macfarlane added that leaving Walmart stores would not have a material impact on the company's results.
Net income for the fourth quarter rose 13 percent to $664.3 million, or $2.42 per share, in the fourth quarter from $586.1 million, or $1.99 per share, a year earlier. The company's total revenue rose 10 percent to $2.20 billion. Analysts on average had expected earnings of $2.61 per share or revenue of $2.28 billion, according to Thomson Reuters I/B/E/S.
Shares of the company, with a market value of nearly $8 billion, have risen 60 percent this year. They closed down 2 percent at $28.83 on the New York Stock Exchange on Wednesday.”