Company: FCFS
Filing Date: 2025-02-03
Form Type: 10-K
Source: 0000840489-25-000032
Chunk: 37

Company: FirstCash Holdings, Inc.
Filing Date: 2025-02-03
Form: 10-K
Item: Item 7A
Chunk 37
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Table of Contents

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market risks relating to the Company’s operations result primarily from changes in interest rates, gold prices and foreign currency exchange rates. The impact of current-year fluctuations in foreign currency exchange rates, in particular, are further discussed in Part II, Item 7 herein. The Company does not engage in speculative or leveraged transactions, nor does it hold or issue financial instruments for trading purposes. 

Gold Price Risk

The Company has significant holdings of gold in the form of jewelry inventories and pawn collateral, and a significant portion of retail merchandise sales are gold jewelry, as are most of the wholesale scrap jewelry sales. At December 31, 2024, the Company held approximately $174.0 million in jewelry inventories, which were primarily gold, representing 52% of total inventory. In addition, approximately $336.6 million, or 65%, of total pawn loans were collateralized by jewelry, which was also primarily gold. Of the Company’s total retail merchandise revenue during 2024, approximately $602.8 million, or 40%, was from jewelry sales. During 2024, the average market price of gold increased by 23% from $1,942 to $2,385 per ounce. The price of gold at December 31, 2024 was $2,609 per ounce compared to $2,078 at December 31, 2023. A significant and sustained decline in the price of gold would negatively impact the value of jewelry inventories held by the Company and the value of gold jewelry pledged as collateral by pawn customers. As a result, the Company’s profit margins from the sale of existing jewelry inventories could be negatively impacted, as could the potential profit margins on gold jewelry currently pledged as collateral by pawn customers if forfeited by the customer. In addition, a decline in gold prices could result in a lower balance of pawn loans outstanding for the Company, as customers generally would receive lower loan amounts for individual pieces of pledged gold jewelry, although the Company believes that many customers would be willing to add additional items of value to their pledge in order to obtain the desired loan amount, thus mitigating a portion of this risk.  

Foreign Currency Risk

The financial statements of the Company’s subsidiaries in Mexico, Guatemala and Colombia are translated into U.S. dollars using period-end exchange rates for assets and liabilities and average exchange rates for revenues and expenses. Adjustments resulting from translating net assets are reported as a separate