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By David Gibbs

Earnings: Q4 profits, excluding items, of $0.42 versus estimates of $0.38 and $0.39 in Q4 last year.

Revenue: Up 28% YOY to $159 million.

Jeff Weiss, the company’s Chairman and CEO, stated:

I am excited to announce another year of record performance for our Company with consolidated total revenue growing by 15.7% to a record $610.9 million for the fiscal year, while consolidated adjusted EBITDA increased to a record $182.2 million, a 31.6% increase over the prior fiscal year. This record performance was achieved despite a challenging global economy still suffering with high unemployment and a significantly reduced average work week for hourly wage based workers.

Comment: Dollar Financial (DLLR) provides a wide range of consumer financial products and services including check cashing, single-payment consumer loans, longer-term installment loans, pawn lending, debit cards, phone/gift cards, bill payment, money orders, money transfers, foreign exchange, gold buying and legal document processing services.

As of June 30, 2009, DLLR’s global store network consisted of 1,206 locations, and it demonstrated to the Street last Thursday that now may be the time to get behind shares.

Besides the beat on EPS and revenues, operating margins rose to 41.4% from 34.7% and fees from consumer lending, the company’s cash cow, shot up 28% YOY, though check-cashing revs fell marginally. Pawn related revenue nearly doubled, but remains a relatively small piece of the DLLR pie.

DLLR issued positive guidance, forecasting FY11 earnings from operations of $2.05-$2.30 versus estimates of $2.01. Management also announced the acquisition of Folkia Group for approx. $28 million, a deal that is expected to be immediately accretive.

Shares traded up huge off the news, adding more than 26% in a single day. DLLR had seen it’s price fall by more than 40% since mid-April as news relating to a class action suit out of Canada overhung shares. With the Q4 beat and management commentary, the Street seems to have had those concerns at least partially alleviated.

With it’s recent downtrend officially broken, look for shares to test resistance in the $20.24-$20.72 range. If they can push through, a move towards $23-$24 would be the next objective. From a longer-term standpoint, particularly after seeing post-earnings selloffs in companies like J. Crew (JCG), Coach (COH) and Tiffany & Co. (TIF) in just the past week, a move into a company like DLLR may be the way to go. All three of the above and many more have warned of a second half slowdown, and it’s in those environments that a payday loan/check-cashing company is likely to thrive.

As we’ve expounded here at Wall St. Cheat Sheet over and again, an underclass is developing in America. When those afflicted can no longer participate in the conventional economy, companies like DLLR will be the one’s laying in wait, offering them near-usurous short-term financing. As the underclass expands, profit opportunities for DLLR cannot but expand in lock-step.

(Click to enlarge)

Disclosure: No position

Source: One Stock Thriving Off America’s Burgeoning Underclass: Dollar Financial Shoots Up 26%