"

Estimated reading time: 1 minute, 3 seconds

Franchise Sales, Timing, Hurt Liberty Tax Revs

John Hewitt, Liberty TaxA drop in sales of territories to existing franchisees cut revenue for JTH Holdings, the parent of Liberty Tax, during the second quarter ended October 31. Revenue fell to $7.3 million in the most recently ended quarter, down 17 percent from $8.8 million a year ago. That was despite the fact that there were 197 new franchisees during the quarter, up 27 percent from a year earlier.


Outside of tax season, the company's main sources of revenue are franchisee fees and interest income. The latter, at nearly $3 million for the quarter, was up from $2.6 million a year earlier and was the largest source of revenue. Franchise fees fell to $2.3 million from $4.2 million. CEO John Hewitt also said that company did not get much help from its deal to go into 300 Wal-Mart stores because that contract was concluded late in the quarter.

"More franchisees are choosing rent-to-own for expansion in Wal-Mart," Hewitt said during this week's earnings webcast. Revenue from that source will not be recognized until the fourth quarter when the operators make a decision on purchasing those sites.

With Liberty ramping up for tax season, the decline in revenue coupled with higher expenses led to an increase in its loss. JTH reported a loss of $6.7 million, an increase from $4.2 million in red ink in last year's corresponding period.


Read 4754 times
Rate this item
(0 votes)

Visit other PMG Sites:

Template Settings

Color

For each color, the params below will give default values
Tomato Green Blue Cyan Dark_Red Dark_Blue

Body

Background Color
Text Color

Header

Background Color

Footer

Select menu
Google Font
Body Font-size
Body Font-family
Direction
PMG360 is committed to protecting the privacy of the personal data we collect from our subscribers/agents/customers/exhibitors and sponsors. On May 25th, the European's GDPR policy will be enforced. Nothing is changing about your current settings or how your information is processed, however, we have made a few changes. We have updated our Privacy Policy and Cookie Policy to make it easier for you to understand what information we collect, how and why we collect it.