H&R Block Inc. reported a 29.5 percent increase in its seasonal loss in August, September and October ahead of the company’s ramp up toward tax season next year.
The Kansas City-based tax preparation company said lower revenue and added expenses from selling its bank and other actions had expanded the loss.
Block said it lost $145 million, or 55 cents a share, in what is the second quarter of the company’s fiscal year. A year ago, it had lost $112 million, or 41 cents a share, during the quarter.
Revenue totaled $128.4 million, down 4.6 percent from a year ago. H&R Block collects most of its revenue during February, March and April, the busiest months of the tax season. Costs continue as the company continues to help clients, work on its software and other products and develops its strategy and marketing campaigns for the coming tax season.
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The second quarter marked H&R Block’s sale of its bank, which freed it from large capital requirements of banking regulators. The company is using the freed up capital in part to finance a buyback of $3.5 billion of its own shares over several years.
In the earnings release, chief executive Bill Cobb said that with the sale of the bank “we have completed the final step in a multi-year journey that now allows us to take positive steps towards the capital structure that is appropriate for our business.”
Management is scheduled to discuss the upcoming tax season during a conference call with analysts Tuesday morning. Cobb offered a glimpse at the annual strategy and outlook session in the earnings report.
“We are excited about the upcoming tax season, with a focus on executing our Tax Plus strategy. Our tax professionals are ready to provide the expert advice expected by our clients and our DIY software offerings are the best they have ever been,” he said in the announcement.