AUSTIN, Texas, July 1, 2013 /PRNewswire/ -- EZCORP, Inc. (NASDAQ: EZPW), a leading provider of instant cash solutions for consumers, today announced that because of the precipitous decline in gold prices and the subsequent decline in gross margins on gold scrapping, the company does not expect to achieve its previously announced guidance for its third fiscal quarter ended June 30, 2013, and its current fiscal year ending September 30. The company expects the impact on earnings per share will be in excess of 35 cents in the second half of the fiscal year. The company had indicated in its second quarter earnings release that a continuation of the challenging environment would likely lead to earnings in the lower end of its guidance range, and since then the price of gold has dropped much further.
"We continue to have a very large and successful gold business and expect that we will monetize more gold through our retail sales channels where margins are substantially higher than our scrap margins," said Paul Rothamel, EZCORP's President and CEO. "As a result of these changes in our marketplace, we are accelerating our consolidated strategic plan to diversify our business across geographies, channels, and products. This will help to insulate us against these types of short-term external impacts."The company also announced that as a part of the accelerated strategic plan, it will close more than 100 legacy stores in a variety of locations. These stores are generally older, smaller stores, which do not fit the company's preferred "store within a store" (SWS) format. "While we are trimming back these locations, the overall company will continue to grow by adding 185 new stores within this fiscal year, broadening our online selling and lending channels, and adding numerous new products across our portfolio of companies to better serve our customers in the formats they desire with the products and services they want," said Rothamel.