Q2 2024 PROG Holdings Inc Earnings Call Transcript
Key Points
- PROG Holdings Inc (PRG) surpassed expectations for GMV growth and exceeded the high end of their revenue and earnings outlook for Q2 2024.
- The company achieved consolidated revenue of $592.2 million, surpassing the high end of their outlook range by $17.2 million.
- Non-GAAP diluted EPS of $0.92 exceeded expectations, bolstered by a reduced share count from the share repurchase program.
- The PROG Marketplace delivered over 250% growth year to date through June 30, 2024, and is on track to exceed full-year expectations.
- The company maintained a healthy lease portfolio with a write-off rate of 7.7%, consistent with pre-pandemic levels, and expects it to be the peak for 2024.
- Q2 revenues for the Progressive Leasing segment declined 0.8% year-over-year, primarily driven by a smaller gross lease asset balance.
- Gross margin of 32.6% in Q2 2024 was 40 basis points lower compared to Q2 2023, driven by normalized levels of 90-day purchase periods.
- The provision for lease merchandise write-offs was 7.7% in Q2, which is expected to be the high point for the year, indicating potential future volatility.
- Despite cost-cutting measures, the company had to maintain investments in marketing, sales, and technology to drive GMV, which could pressure margins.
- The company faces ongoing challenges in consumer demand due to the macroeconomic environment, which could impact future performance.
Good day and thank you for standing by. Welcome to PROG Holdings' Second Quarter Earnings Conference Call. (Operator Instructions) Please note that today's conference is being recorded.
I will now hand the conference over to your speaker host, John Baugh, VP of Investor Relations. Please go ahead.
Thank you and good morning, everyone. Welcome to the PROG Holdings Second Quarter 2024 Earnings Call. Joining me this morning are Steve Michaels, PROG Holdings' President and Chief Executive Officer; and Brian Garner, our Chief Financial Officer. Many of you have already seen a copy of our earnings release issued this morning, which is available on our Investor Relations website, investor.progholdings.com.
During this call, certain statements we make will be forward looking, including comments regarding our revised 2024 full year outlook and our outlook for the third quarter of 2024, the health of our portfolio, and our expectations for write-offs for our Progressive Leasing segment
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