CHICAGO (AP) — H&R Block Inc. reported lower fourth-quarter profit and revenue on Tuesday but touted the progress it has made in restructuring and gaining market share.
Key factors in the declines were $31.2 million in severance costs, $5.5 million in impairment charges and the offer of free advances on tax refunds for customers who agreed to deposit the refunds on the company's prepaid debit cards. The promotion led to a 24 percent increase in the number of cards issued, but it cost the company $49.3 million in revenue.
On a conference call with investors, CEO Bill Cobb declined to outline the company's strategy for the 2013 tax season.
Analysts wanted to know what will happen to demand for the cards with no giveaway.
QUESTION: Any thoughts as to what the potential impact could be from a consumer backlash going from free to maybe a pay model now?
COBB: We'll take that into consideration. That's why we haven't settled on the pricing yet. ... We want to make sure we have the right value proposition there. ... The plan is not to decline in clients or anything like that.