On July 24, 2024, PROG Holdings Inc (PRG, Financial) released its 8-K filing for the second quarter of 2024, showcasing a robust performance that surpassed analyst expectations. PROG Holdings Inc is a financial technology holding company that provides transparent and competitive payment options to consumers. The Company operates through two main segments: Progressive Leasing, an in-store, app-based, and e-commerce point-of-sale lease-to-own solutions provider, and Vive Financial, an omnichannel provider of second-look revolving credit products.
Performance Overview
PROG Holdings Inc reported consolidated revenues of $592.2 million for Q2 2024, slightly down by 0.1% from the same period in 2023. Despite this minor decline, the company achieved a diluted EPS of $0.77, surpassing the analyst estimate of $0.65. The non-GAAP diluted EPS stood at $0.92, consistent with the previous year.
Adjusted EBITDA for the quarter was $72.3 million, a 3.7% decrease from $75.0 million in Q2 2023. This decline was attributed to headwinds from portfolio performance returning to pre-pandemic levels and a smaller portfolio size during the quarter. However, these were partially offset by reduced SG&A expenses due to cost reduction actions executed in the first quarter of 2024.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Consolidated Revenues | $592.2 million | $592.8 million |
| Net Earnings | $33.8 million | $37.2 million |
| Adjusted EBITDA | $72.3 million | $75.0 million |
| Diluted EPS | $0.77 | $0.79 |
| Non-GAAP Diluted EPS | $0.92 | $0.92 |
Segment Performance
Progressive Leasing, the primary revenue driver, reported a GMV of $454.5 million, marking a 7.9% year-over-year growth. The provision for lease merchandise write-offs was 7.7%, within the company's targeted annual range of 6%-8%.
Liquidity and Capital Allocation
PROG Holdings ended Q2 2024 with $250.1 million in cash and $600 million in gross debt. The company repurchased $36.7 million of its stock during the quarter at an average price of $35.67 per share, leaving $438.8 million of repurchase authorization under its $500 million share repurchase program. Additionally, a cash dividend of $0.12 per share was paid.
Revised 2024 Outlook
PROG Holdings has raised its full-year 2024 outlook for revenue and earnings. The revised outlook projects total revenues between $2.4 billion and $2.45 billion, up from the previous range of $2.285 billion to $2.36 billion. Net earnings are expected to be between $110.5 million and $116 million, compared to the prior range of $97.5 million to $108 million.
| Metric | Revised 2024 Outlook (Low) | Revised 2024 Outlook (High) | Previous 2024 Outlook (Low) | Previous 2024 Outlook (High) |
|---|---|---|---|---|
| Total Revenues | $2,400,000 | $2,450,000 | $2,285,000 | $2,360,000 |
| Net Earnings | $110,500 | $116,000 | $97,500 | $108,000 |
| Adjusted EBITDA | $265,000 | $275,000 | $240,000 | $255,000 |
| Diluted EPS | $2.52 | $2.68 | $2.18 | $2.43 |
| Non-GAAP Diluted EPS | $3.25 | $3.40 | $2.85 | $3.10 |
Analysis
PROG Holdings Inc's Q2 2024 performance highlights the company's resilience and strategic execution in a challenging retail environment. The growth in GMV and the ability to manage portfolio performance effectively are positive indicators for future performance. The revised full-year outlook reflects confidence in continued growth and operational efficiency.
For value investors, PROG Holdings Inc's ability to exceed earnings expectations and its proactive capital allocation strategies, including share repurchases and dividends, make it a compelling consideration. The company's focus on cost management and strategic investments in marketing, sales, and technology are likely to drive sustained growth and shareholder value.
Explore the complete 8-K earnings release (here) from PROG Holdings Inc for further details.
