Any reduction in rent would have a sizable impact on profits. They pay about $410 million in occupancy costs each year. The first is that they are renegotiating their leases with their landlords. H&R Block announced four new significant decisions that will impact the fiscal year 2021. As of April, it has over $2.6 billion in cash, comfortably covering its current liabilities. H&R Block will consequently experience an increase of $40 million in interest expense. It plans to continue paying out its dividend with this money and ensure that it can afford the $640 million in long term debt due this year. It took out this money as a precautionary measure. In the past ten years, revenue has fallen by 10%, but per-share revenue is up over 40% because of stock buybacks.Īt the beginning of the pandemic, H&R Block decided to tap its full revolver credit worth $2 billion. It reported a loss of $7.5 million compared to the previous year’s profit of $450 million. During its latest earnings call, H&R Block reported that annual revenue had declined from $3.1 billion to $2.6 billion. This will result in a solid fiscal year 2021. H&R Block expects to gain some of these clients back during its first quarter (May through July). This extension caused H&R Block to report that their tax returns preparations were down 14% (YoY). As a result, the US government has pushed back the tax filing date from April to July. H&R Block operates its tax preparation business through a mixture of 2,900 franchise locations and 6,500 corporate-run locations.ĬOVID-19 has had a profound impact on the US economy. During the tax filing period, employee headcount increases from 3,500 to 80,000 to help H&R Block with the +23 million tax preparations they complete per year. H&R Block tends to be profitable only one quarter a year during the tax filing season. H&R Block is also the largest tax preparation firm in Canada, as well as in Australia. It has a market share of around 12.5% in the $21 billion industry. H&R Block is the largest tax preparation firm in the US by revenue and second-largest in regards to the number of tax files prepared.
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