H&R Block (HRB) is ready to tackle its 55th tax season. However, the company realizes that it needs to rejuvenate things, as its brand has become outmoded and growth has slowed.
This week, the company posted its latest quarterly report, which showed a 7.2% decrease in revenues to $326.1 million and a loss of $128.6 million, or $0.38 per share. Because of the seasonality of the tax business, the second half of the year typically has losses.
However, on its earnings call, H&R Block had an extensive presentation of its new plans. All in all, it was a fairly honest look. For example, H&R's pricing has been relatively high -- at least compared to the value delivered. Also, the company has been restrained in pursuing a digital strategy. Perhaps the main reason is the fear of competing against its retail business.
So, what does H&R Block plan to do? First of all, the company is revamping its commercials, with a focus on real-life situations where people are looking for tax relief. In fact, each commercial will have the tag-line of "Click, Call, or Come Over."
Next, H&R Block realizes it needs to become more relevant to younger generations, who will become the future taxpayers. The main group is the millennials and they expect more online approaches. To this end, H&R Block plans to rollout social media content, such as on Facebook and Twitter. It also means revamping the offices -- making them look more inviting.
Finally, H&R Block wants to grow its franchising efforts, which should help spur growth.
No doubt, the plan is ambitious and will not be easy. And, it will likely take a few years to get traction. But, it does look like H&R Block is getting serious about making real changes.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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