H&R Block, Inc. (NYSE:HRB) Q1 2021 Earnings Conference Call - Final Transcript

Sep 01, 2020 • 04:30 pm ET


H&R Block, Inc. (NYSE:HRB) Q1 2021 Earnings Conference Call - Final Transcript


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Jeffrey J. Jones II

the progress we're making on our strategic roadmap. Tony will then discuss our Q1 results and share high level thoughts on the balance of fiscal '21. He will also provide an update on our capital structure, including details on our recently completed debt offering and we'll talk about our agreement with Meta.

I'd like to start with the tax season. The majority of the season took place, while the country was dealing with the pandemic. We navigated the various state and local orders and took steps to promote the safety and well-being of our associates and clients. A significant number of our offices were closed. And those that weren't [Phonetic], moved to a drop-off model with limited in-person interaction with our clients. The reality is that from mid-March through the end of the season, there has been no such thing as business as usual in any of our offices. This is especially true during the May through July time frame, with around half of our offices closed and those that were open, subject to various local orders. And while this time has been challenging, we have looked at it as an opportunity to demonstrate our commitment to our clients and communities.

Additionally, we accelerated our efforts to transform our tax business, as we innovate to deliver expertise to consumers in new and exciting ways. The capabilities we've built to enable clients to digitally drop off their forms, interact with tax pros virtually, review their returns online, and sign and pay remotely provide them with the expertise they wanted when they weren't comfortable with in-person service or when our offices were closed. And these innovations helped us engage with our DIY clients in new ways, bringing our expertise to life within our software offering. In total, our digitally-enabled returns grew over 150%. It's clear that consumers are taking notice of how the expanded H&R Block platform is bringing digital capabilities to those who want assistance and on-demand human help to those who prefer to use software to file.

Turning to category results. I'll start with our assisted business. We had a strong start to the tax season, as we were tracking to our goals of improving our client trajectory and holding market share. Because of the impact of the pandemic and the changes we made to our operating model, we anticipated a decline in volume as well as the loss of market share. Our results, however, were strong as we finished with a small share loss. This is attributable to the agility and resilience of our associates, tax pros and franchisees that I mentioned earlier, as well as the digital efforts I just discussed.

In DIY, we also finished strong. Online growth was 10.6%, which led to total DIY return growth of 8%, as we held share in the category when excluding stimulus returns. Our product continues to evolve and win accolades from third parties. And our clients love the experience as well, as Net Promoter Scores improved again, following a