Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at H&R Block (NYSE: HRB) and the best and worst performers in the specialized consumer services industry.
Some consumer discretionary companies don’t fall neatly into a category because their products or services are unique. Although their offerings may be niche, these companies have often found more efficient or technology-enabled ways of doing or selling something that has existed for a while. Technology can be a double-edged sword, though, as it may lower the barriers to entry for new competitors and allow them to do serve customers better.
The 11 specialized consumer services stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1.9% while next quarter’s revenue guidance was in line.
While some specialized consumer services stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.8% since the latest earnings results.
H&R Block (NYSE: HRB)
Founded in 1955 by brothers Henry W. Bloch and Richard A. Bloch, H&R Block (NYSE: HRB) is a tax preparation company offering professional tax assistance and financial solutions to individuals and small businesses.
H&R Block reported revenues of $1.11 billion, up 4.6% year on year. This print exceeded analysts’ expectations by 1.6%. Despite the top-line beat, it was still a mixed quarter for the company with full-year revenue guidance beating analysts’ expectations.
"Fiscal 2025 marked another year of meaningful progress in our transformation journey, with strong revenue growth, disciplined capital allocation, and continued innovation across our client offerings,” said Jeff Jones, president and chief executive officer.
The stock is down 1% since reporting and currently trades at $50.90.
Read our full report on H&R Block here, it’s free.
Best Q2: Matthews (NASDAQ: MATW)
Originally a death care company, Matthews International (NASDAQ: MATW) is a diversified company offering ceremonial services, brand solutions and industrial technologies.
Matthews reported revenues of $349.4 million, down 18.3% year on year, outperforming analysts’ expectations by 8.5%. The business had an exceptional quarter with a beat of analysts’ EPS estimates and full-year EBITDA guidance beating analysts’ expectations.
Matthews pulled off the biggest analyst estimates beat among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $23.90.
Is now the time to buy Matthews? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: LKQ (NASDAQ: LKQ)
A global distributor of vehicle parts and accessories, LKQ (NASDAQ: LKQ) offers its customers a comprehensive selection of high-quality, affordably priced automobile products.
LKQ reported revenues of $3.64 billion, down 1.9% year on year, in line with analysts’ expectations. It was a softer quarter as it posted full-year EPS guidance missing analysts’ expectations and a miss of analysts’ EPS estimates.
As expected, the stock is down 20.9% since the results and currently trades at $30.54.
Read our full analysis of LKQ’s results here.
1-800-FLOWERS (NASDAQ: FLWS)
Founded in 1976, 1-800-FLOWERS (NASDAQ: FLWS) is an online retailer of flowers, gifts, and gourmet foods, serving customers globally.
1-800-FLOWERS reported revenues of $336.6 million, down 6.7% year on year. This number surpassed analysts’ expectations by 2%. However, it was a slower quarter as it logged a significant miss of analysts’ EPS and EBITDA estimates.
The stock is down 10.4% since reporting and currently trades at $4.78.
Read our full, actionable report on 1-800-FLOWERS here, it’s free.
Frontdoor (NASDAQ: FTDR)
Established in 2018 as a spin-off from ServiceMaster Global Holdings, Frontdoor (NASDAQ: FTDR) is a provider of home warranty and service plans.
Frontdoor reported revenues of $617 million, up 13.8% year on year. This print beat analysts’ expectations by 2.3%. Overall, it was a strong quarter as it also put up EBITDA guidance for next quarter exceeding analysts’ expectations and full-year EBITDA guidance beating analysts’ expectations.
Frontdoor achieved the fastest revenue growth among its peers. The stock is up 14% since reporting and currently trades at $66.68.
Read our full, actionable report on Frontdoor here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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