H&R Block, Inc. (NYSE:HRB) Q4 2019 Earnings Conference Call Transcript
Jun 11, 2019 • 08:30 am ET
Jeffrey J. Jones
share more about this later.
We obviously have a lot to discuss, so let me walk you through what we will cover on today's call. First, I'll provide our perspective on the tax season for both the industry and H&R Block. Next, I'll discuss Wave and how they fit into our long-term strategy. Tony will then review our fiscal '19 results, the financial impact of Wave, our fiscal '20 outlook and capital allocation.
Let's first look at tax season '19, beginning with the overall industry. It was an unusual season with the government shutdown affecting the start of the season and changes to the tax code impacting refunds. Both contributed to an overall delay, which continued throughout the season and likely resulted in an increase in extension filings. This led the industry returns being essentially flat to prior year, which was lower than expectations.
Consistent with prior years, industry results show a slight shift from Assisted to DIY. When taking into account the decline in paper returns, which are typically more weighted to DIY, the Assisted to DIY shift was approximately 60 basis points, which is consistent with the last several years and in line with our expectations.
Turning to our results, let me recap what we set out to do this year. We made significant improvements this season in how we serve our clients. In our, Assisted business, we focused on enhancing the value we deliver while developing a clear brand promise to differentiate H&R Block. In DIY, we made investments to improve the product and grow awareness, while pricing competitively to deliver tremendous value.
And in virtual, we offered consumers three distinct ways to access the expertise of our tax pro network. We achieved our objectives in each channel and are pleased with our results, outperforming the overall market and taking DIY share for the third straight year.
In the Assisted business, we're excited about the progress we made this year, with significant operational improvements across every aspect of the business from field operations, to experience for new clients, to pricing. With respect to pricing, we addressed what was a significant pain point for our clients in two ways.
First, we led the industry with upfront transparent pricing, and second, we invested in price decreases for certain client segments, and the feedback from both our clients and tax pros has been extremely positive. In fact, client satisfaction scores around price for value increased 9 points. Additionally, we focused on improving tax pro training, operational improvements to drive consistency in our offices and an enhanced experience for new clients. Nearly one-third of our tax pros increase their certification levels. We converted clients at a greater rate and we increased overall NPS by 9 points.
These initiatives are reflected in our volume results in Assisted, while US Assisted volume declined 1.7%, this was expected due to the elimination of the Free EZ promotion. Excluding Free EZ, our Assisted results were in line with the industry, which represents an improvement in