As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the specialized consumer services industry, including WeightWatchers (NASDAQ:WW) and its peers.
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 strong Q3. As a group, revenues beat analysts’ consensus estimates by 1.1% while next quarter’s revenue guidance was 2% below.
Thankfully, share prices of the companies have been resilient as they are up 7% on average since the latest earnings results.
WeightWatchers (NASDAQ:WW)
Known by many for its old cable television commercials, WeightWatchers (NASDAQ:WW) is a wellness company offering a range of products and services promoting weight loss and healthy habits.
WeightWatchers reported revenues of $192.9 million, down 10.2% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with an impressive beat of analysts’ EPS estimates but a miss of analysts’ EBITDA estimates.
“For over six decades, WeightWatchers has been the trusted leader in weight management, offering a full spectrum of science-backed, proven weight management solutions. With our expanded clinical offering, iconic trusted brand, and global community of members, we are well-equipped to succeed in today’s rapidly evolving market,” said Tara Comonte, Interim CEO.
WeightWatchers delivered the slowest revenue growth and weakest full-year guidance update of the whole group. Interestingly, the stock is up 6.9% since reporting and currently trades at $1.23.
Is now the time to buy WeightWatchers? Access our full analysis of the earnings results here, it’s free.
Best Q3: 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 $446.7 million, down 7% year on year, outperforming analysts’ expectations by 1.4%. The business had an exceptional quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
The market seems happy with the results as the stock is up 20.6% since reporting. It currently trades at $30.77.
Is now the time to buy Matthews? Access our full analysis of the earnings results here, it’s free.
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 $242.1 million, down 10% year on year, falling short of analysts’ expectations by 1.6%. It was a mixed quarter as it posted full-year EBITDA guidance topping analysts’ expectations but a miss of analysts’ EBITDA estimates.
Interestingly, the stock is up 4.9% since the results and currently trades at $8.38.
Read our full analysis of 1-800-FLOWERS’s results here.
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 $3.58 billion, flat year on year. This result missed analysts’ expectations by 1.9%. More broadly, it was a mixed quarter as it also recorded a decent beat of analysts’ adjusted operating income estimates but full-year EPS guidance missing analysts’ expectations.
LKQ had the weakest performance against analyst estimates among its peers. The stock is up 1.9% since reporting and currently trades at $38.50.
Read our full, actionable report on LKQ here, it’s free.
Service International (NYSE:SCI)
Founded in 1962, Service International (NYSE: SCI) is a leading provider of death care products and services in North America.
Service International reported revenues of $1.01 billion, up 1.2% year on year. This print met analysts’ expectations. Taking a step back, it was a mixed quarter as it also produced a narrow beat of analysts’ funeral services performed estimates.
The stock is up 1% since reporting and currently trades at $76.93.
Read our full, actionable report on Service International here, it’s free.
Market Update
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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