Jeffrey Silber of BMO Capital Markets commented in a research report following the earnings print that the company's results were "roughly in line" in a "seasonally light quarter." The analyst noted management stated that a "sluggish" performance was due to a new client issue as "retention was relatively stable."
However, Silber added that due to ongoing competitive threats, the company's management team was "reluctant" to provide commentary on any expected changes next tax year. However, the company did cite it has evaluated all aspects of its business and stated it will "look different" next tax season in terms of focus and marketing.
Moreover, H&R Block has decided not to hold its annual Investor Day event in December as it focuses on improving operations. Management will provide guidance as part of its fiscal second-quarter earnings conference call in December.
Finally, the analyst stated the company's cost cuts to date, a main focal point of investors, were mostly offset by additional amortization and rent expenses from franchise repurchases.
Bottom line, given a lack of commentary and no Investor Day scheduled this year, the analyst stated that there are "many questions still unanswered."
Shares remain Market Perform rated with a price target slightly raised to $24 from a previous $23.
At time of writing, H&R Block shares were down 11.32 on the day, trading at $21.46.
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