H&R Block Sees Office Traffic Falling
NEW YORK (Reuters)
- H&R Block Inc. (NYSE:HRB - news) on Thursday said it expects
a drop in clients coming to its offices for tax preparation services
this fiscal year and it affirmed an earnings forecast that trails
current Wall Street estimates.
H&R Block shares fell 6 percent to their lowest level in more
than four months.
The top U.S. tax preparation service said the number of retail
office clients fell 2.4 percent through March 15. That was offset
by a 15.2 percent increase in customers using its computer-based
tax services, leading to a modest overall gain in clients of 0.4
Tax preparation and related fees increased 5.6 percent to $1.6
billion through March 15, the Kansas City company said. The average
fee per retail office client rose 8.2 percent to $136.08.
"We continue to see weakness in the number of clients in
our retail offices and now expect that retail office clients served
will likely decline for the year," Chairman and Chief Executive
Officer Mark Ernst said in a statement.
Block expects earnings for the fiscal year ending later this month
to be in line with its previous estimate of $3.65 to $3.85 per
That, however, trails the average analyst's estimate of $3.89
per share for the year, according to Reuters Research, a unit
of Reuters Group Plc. Most of the annual profit is expected to
come from the current fourth quarter, which coincides with the
U.S. tax return filing season. Analysts have pegged fourth-quarter
earnings at $3.19 per share.
"We remain on plan for revenue growth per retail client,
which we expect will increase in the range of 6 to 8 percent,"
Block said it will provide additional interim updates on April
16 and April 30. In a March 18 update, Ernst had said the company
was on track for a tax season that was "good, but not great."
Block's shares were down $2.78 at $48.25 on the New York Stock
Exchange (news - web sites), where they were the second-biggest
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