EZCorp’s (EZPW) Q2 revenue climbed 10.5% year-over-year to a second-quarter record $285.6 million, the pawnshop chain reported on May 1, exceeding consensus by $3.4 million. A 14.4% jump in pawn loans outstanding, compared with Q2 of 2023, drove a 15.2% increase in pawn-service charges to $107.2 million and the company saw merchandise and jewelry-scrapping sales gain 8.0% and 6.9%, respectively, to $164.7 million and $13.7 million. Furthermore, with gross margin on this sold merchandise of 35% remaining within its targeted 35-38% range thanks to EZPW keeping low-value aged inventory limited to just 2.3% of the total, adjusted earnings climbed 21.7% to 28 cents per share, which was 2 cents better than what analysts had been projecting.

With the challenging macro-economic backdrop keeping demand from customers looking to satisfy their short-term cash needs elevated, EZPW ended the quarter with its outstanding loan balance at a Q2 record $235.8 million. Moreover, the company added 15 stores in Q2. This includes nine new locations in Latin America, which helped expand its presence in that region, as well as six stores acquired in the U.S. That’s why even as EZPW also consolidated six stores, it netted an additional nine during the quarter. I think that will also continue to bode well for EZPW’s points-based EZ+ Rewards program, which is designed to incentivize customers to transact more, continues to grow across all of its regions, and saw enrolled customers rise by 10% over the previous quarter to 4.6 million.

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That’s why I’m not concerned by the more than 6% post-earnings slide in the stock. Indeed, this isn’t the first time EZPW’s stock has fallen despite reporting better-than-expected quarterly results. What matters is that it’s been able to recover from these brief bouts of weakness and climb to new highs. Given my view that EZPW’s operating performance in the periods ahead will continue to impress, I think that will prove true again.