Shares of H&R Block surged nearly 15 percent Wednesday. Credit the Kansas City-based company’s claim Tuesday that it had taken market share away from its rivals.
A $3.10 jump in shares pushed them to $23.94, a gain of 14.88 percent on the day.
Rival tax preparer Jackson Hewitt Tax Services said Wednesday that it too gained market share during the first half of the tax season.
So who lost business?
“Liberty Tax lost some market share,” said Alexander Paris, an analyst at Barrington Research who follows the industry. “It’s not enough to be completely from Liberty Tax. It had to come from mom and pops also.”
Liberty Tax reported Wednesday that it handled 16.4 percent fewer tax returns through the end of February than it had a year earlier. One reason, Paris said, was that the company had about 250 fewer tax stores open this year.
Its remaining stores saw a much smaller reduction in customer traffic, Paris said, down only about 7 percent from a year ago.
“It’s not as bad as it looks for Liberty Tax,” Paris said.
Its shares also were up Wednesday, by about 8.45 percent.
One more twist to the story: All three tax services said they had prepared fewer returns so far this tax season than a year ago.
The whole tax season has been delayed by efforts to combat tax identity fraud. The IRS had said it would delay millions of tax refunds until at least Feb. 15, and that kept many early filers on the sidelines.
H&R Block had said Tuesday that it knew it gained market share because its tax preparation count was down only 7 percent through Feb. 24, a date at which the Internal Revenue Service had said total filings were down 10 percent. Jackson Hewitt used similar math to say it claimed an increased share of the market as well.