WRLD - World Acceptance stock plunges as lending declines underwriting tightens

World Acceptance ( NASDAQ: WRLD ) plummeted 23% on Thursday after the provider of installment loans and tax preparation services posted a fiscal Q2 loss per share as lending activity declined from Q2.

Gross loans outstanding of $1.60B as of Sept. 30, 2022 decreased by 2.6% from $1.64B at June 30, 2022.

During  the quarter, World Acceptance ( WRLD ) said it saw a decline in borrowing from new and former customers compared with the same quarter of the prior year. Also, the company continued to tighten its credit model underwriting on new borrowers implemented in the prior quarter and took steps to improve the gross yield to expected loss ratio for all new, former, and refinance customer originations.

Q2 adjusted EPS of -$0.20, missed by $0.37 as the company was expected to report EPS of $0.17. That loss compared with adjusted EPS of $1.15 in the prior quarter and with $4.26 in the year-ago quarter.

Provision for credit losses was $68.6M in Q2 vs. $85.8M in Q1 and $25.2M in Q2 2022.

"Expected loss rates by tenure bucket also increased due to actual loss rates increasing as credit normalizes," the company said. "This was offset to some degree by a shift in portfolio mix to more tenured customers."

Total revenue for the quarter ended Sept. 30, 2022 was $151.2M, missing the $161.2M consensus, and down from $157.6M in Q1 2023 but up from $137.8M in Q2 2022.

Earlier, World Acceptance ( WRLD ) non-GAAP EPS of -$0.20 misses by $0.37, revenue of $151.2M misses by $9.95M

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