H&R BlockThe CEO also said Block will not repeat its offers of free RACs on Emerald Cards, a debit card program. He said the program was successful in getting cards into more taxpayers' hands, but acknowledged it had not been a financial success.
Cobb's announcements came as the company reported that it cut its net loss for the first quarter ended July 31, but its revenue also fell. The company attributed the decline in revenue to an extension of the Canadian tax filing season in 2011 which produced additional revenue last year. Block lost $106 million for the most recently ended quarter compared to $119 million in red ink a year earlier. Revenue for the first quarter was $96 million, down 4 percent from $101 million a year ago. The company said that last year Canada added $4 million to the top line. A cost-cutting program helped reduce the loss as expenses fell to $193.4 million in the July quarter, down from $212.6 million in last year's corresponding period.
Block operated in 250 WalMart stores during the last tax season, as it moved back into a chain it had parted company with and moving into what had been an exclusive arrangement with Jackson Hewitt. While Cobb said negotiations about then number of WalMart sites have not concluded, he expects there will be more locations open in 2013. He did not directly acknowledge an analyst who commented that Cobb had previously said the WalMart business was Block's least profitable operations. However, he said that expanding the presence was designed to increase the customer base.
"The biggest reason we wanted to expand this year is we found it a good source of new clients last year," last year.
The company did not reveal plans for the Emerald Card or any new bank products and executives generally said they would discuss programs for 2013 at an Investor Day in December. However, Cobb downplayed the possibility that competitors will offer refund loans through institutions that are not federally regulated. In terms of such new products, Cobb continued, "We think they are going to be offered on a limited basis and to a narrow segment of consumers."
Block reported that during the period it completed its first tax season in Brazil and India. Cobb said that the primary objective of the current tax season was to establish a presence, but that the countries represent a strong growth area for future results.
