FirstCash's U.K. Pawn Stores Hold Older Stock, Thinner Gold Margins — Before Ramsdens Lands
U.K. inventory aged over a year hit 11.6% as the scrap margin fell to 27%, ahead of a second U.K. chain purchase.
Inventory sitting unsold for more than a year in FirstCash's U.K. pawn stores reached 11.6% at September 30, 2026, up from 7.9% a year earlier, according to the company's 10-Q filed Monday. The company, which runs pawn stores in the U.S., Latin America and the U.K., is preparing to buy another U.K. chain, Ramsdens.
Older stock, slower turns
U.K. inventories rose 62% to $106.6 million from $65.7 million a year earlier, the filing shows. The company attributed the increase to more jewelry held per store and to the higher cost of inventory acquired through forfeiture or purchase over recent quarters, in line with gold prices.
Inventory turns in the U.K. slowed to 2.0 times from 2.6 times. The aged-inventory share was 13.7% at June 30 in the prior quarter's filing, so the third-quarter reading is lower than that one but well above last year's.
In the U.S., aged inventory was 2.9%, against 1.9% a year ago. Excluding certain recently acquired stores that historically carry much older jewelry, it was 1.6%.
Gold margins shrink
The scrap gross margin in the U.K., on gold sold to wholesalers, fell to 27% in the third quarter from 37% a year earlier. The company blamed the higher cost of inventory acquired over the past several quarters as gold rose. U.K. scrap revenue rose 94% to $45.0 million, mostly because last year's quarter included only part of H&T, the U.K. chain FirstCash bought on August 14, 2025.
Retail margins moved the other way: 33% against 24%, which the company credited to higher gold prices. U.K. segment pre-tax operating income was $29.2 million, with a 29% margin against 33% a year ago.
The company reported it has committed to deliver 57,500 ounces of gold between October 2026 and December 2027 at a weighted-average $4,147 per ounce. It says that is less than the scrap gold it normally produces.
Borrowing to buy Ramsdens
FirstCash agreed to buy Ramsdens, a U.K. pawn operator with over 175 stores, for 675 pence per share in cash, an equity value of about £228.6 million ($303.7 million). Ramsdens' shareholders and the Financial Conduct Authority approved it in the third quarter. Closing is expected by the end of 2026, pending U.K. anti-trust approval.
The company plans to fund the deal on its revolving credit facility, which it expanded on August 27 from $700.0 million to $1,055.0 million and extended to August 27, 2031. The amendment lifted the maximum net leverage ratio to 3.5 times EBITDA. The filing shows $169.0 million drawn and $882.5 million available.
The core business is still growing. Third-quarter net income was $101.2 million, or $2.33 a share, against $82.8 million, or $1.86. FirstCash's market value was $7.5 billion in Monday's session.
The company expects the Ramsdens deal to close by the end of 2026, which would add over 175 U.K. stores to a segment already carrying older jewelry.
Sources
- 10-Q Filing — FirstCash Holdings (FCFS) — SEC EDGAR
- 10-Q Filing — FirstCash Holdings (FCFS), Q2 FY2026 filed 2026-07-27 (comparison basis) — SEC EDGAR
- Earnings release (8-K Item 2.02, fcfs10222026exhibit991.htm) — FirstCash Holdings, filed 2026-10-22 — SEC EDGAR
- FirstCash: Q3 Earnings Snapshot – WTOP News — wtop.com
- FirstCash (FCFS) Stock Falls As Q3 Earnings Challenge Premium P E — Yahoo Finance
- FirstCash Non-GAAP EPS of $2.68 beats by $0.05, revenue of $1.1B beats by $30M (FCFS:NASDAQ) | Seeking Alpha — seekingalpha.com
- FirstCash (NASDAQ:FCFS) posts better-than-expected sales in Q3 2026 — Yahoo Finance
- FirstCash Hldgs Q3 Adj. EPS $2.68 Beats $2.63... — benzinga.com
