H&R Block loss wider than expected, shares down

By Anurag Kotoky and Brenton Cordeiro

BANGALORE (Reuters) - H&R Block Inc posted a wider-than-expected quarterly loss on Friday, hurt by higher expenses in tax services segment, and said it expects tax returns filed to fall about 1 to 2 percent in the coming tax season.

Shares of the largest U.S. tax preparer fell 3 percent.

The Kansas City, Missouri-based company said it would close about 300 traditional offices prior to the tax season and added it has no plans to open a "significant" number of new stores this year.

"I think the employment rates are driving lower returns... Only when you see an improvement in the job picture, you will see an improvement in tax returns filed," Northcoast Res analyst Kartik Mehta said.

U.S. job losses were the smallest in a year last month but the unemployment rate unexpectedly jumped to a 26-year high, according to data on Friday that showed the labor market limping toward health.

H&R Block is working on the specifics of its pricing strategy, and would offer some targeted price value schemes for the client segment most affected by the global economic meltdown, a company official said on a conference call with analysts.

"The things that they talked about sound good but it all comes down to execution," Stephens Inc analyst David Burtzlaff said by phone.

The company did not execute its plans to attract more clients last year and lost market share, hence there are still some concerns given past performance, the analyst said.