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Organization and Nature of the Company
12 Months Ended
Dec. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Nature of the Company GENERAL
Organization and Nature of the Company

FirstCash, Inc., (together with its wholly-owned subsidiaries, the “Company”) is incorporated in the state of Delaware. The Company is engaged in the operation of pawn stores, which generate retail sales primarily from the merchandise acquired through collateral forfeitures and over-the-counter purchases from customers. In addition, the stores help customers meet small short-term cash needs by providing non-recourse pawn loans and buying merchandise directly from customers. As of December 31, 2020, the Company owned and operated 2,748 stores in 24 U.S. states and the District of Columbia, all 32 states in Mexico and the countries of Guatemala,Colombia and El Salvador.

Effective June 30, 2020, the Company ceased offering domestic payday and installment loans and no longer has any unsecured consumer lending or credit services operations in the U.S. or Latin America.

Impact of COVID-19

In December 2019, a novel strain of coronavirus (“COVID-19”) surfaced in China and rapidly spread throughout the world. In March of 2020, the World Health Organization declared the outbreak a pandemic. During the end of the first quarter of 2020 and the first part of the second quarter of 2020, many countries, states and other local government officials reacted by instituting quarantines, shelter-in-place and other orders mandating non-essential business closures, travel restrictions and other measures in an effort to reduce the spread of COVID-19, in addition to instituting broad-based stimulus, relief and forbearance programs in an effort to mitigate the economic impact of the pandemic.

The broad shutdowns in response to COVID-19 caused significantly reduced levels of personal spending by consumers in the U.S. and Latin America. Further impacting consumer liquidity in the U.S. during the second quarter were federal stimulus payments, forbearance programs and enhanced unemployment benefits. While there were limited government stimulus programs in Latin America in response to the pandemic, increased cross-border remittance payments from the U.S. to many Latin American countries further impacted Latin America consumer liquidity during the second quarter. The additional consumer liquidity resulted in a significant decline in pawn lending activities, including increased redemptions of existing loans and decreased originations of new loans. Pawn loans as of June 30, 2020 were 39% lower than the prior year, before beginning to recover. The recovery in pawn loans continued throughout the third and fourth quarters, although pawn loan balances as of December 31, 2020 were still lower than prior-year balances. Resulting pawn loan fees were negatively impacted during the second, third and fourth quarters of 2020 as a result of the lower pawn loan balances.

In general, in most jurisdictions where the Company has stores, pawnshops were designated an essential service by federal guidelines and/or local regulations and were allowed to remain open during the broad shutdowns in response to COVID-19. As a result, retail sales in the U.S. during the second quarter increased 24% compared to the prior-year quarter, benefiting from strong demand for stay-at-home products, such as consumer electronics, tools and sporting goods, and were further enhanced by federal stimulus payments made directly to consumers in the U.S. Although the Company experienced strong demand in Latin America for stay-at-home products, retail sales were negatively impacted by a regulatory prohibition of retail transactions enacted in Mexico during the last three weeks of May and the closure of all stores in Colombia and El Salvador during much of the second quarter due to broad government shutdowns. As a result of the significant second quarter increase in retail sales in the U.S. and less forfeited inventory from lower pawn receivable balances, inventory balances were negatively impacted and decreased 32% at June 30, 2020 compared to the prior year-quarter. The lower inventory balances and the lack of government stimulus and a more limited economic recovery in Latin America during the second half of 2020 compared to the U.S. negatively impacted retail sales during the third and fourth quarters but was offset by an increase in retail sales margin, which was primarily a result of continued retail demand for value-priced pre-owned merchandise, increased buying of merchandise directly from customers and lower levels of aged inventory, all of which limited the need for normal discounting.

In addition, the economic global uncertainty resulting from COVID-19 has resulted in increased currency volatility, which caused adverse currency rate fluctuations, especially with respect to the Mexican peso.
The extent to which COVID-19 impacts the Company’s operations, results of operations, liquidity and financial condition will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration and severity of the outbreak, and the actions taken to contain its impact, as well as further actions, such as additional stimulus programs, taken to limit the resulting economic impact, among others.