The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how specialized consumer services stocks fared in Q1, starting with H&R Block (NYSE: HRB).
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 10 specialized consumer services stocks we track reported a slower Q1. As a group, revenues missed analysts’ consensus estimates by 0.6% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady as they are up 1.4% on average 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 $2.28 billion, up 4.2% year on year. This print exceeded analysts’ expectations by 1.3%. Despite the top-line beat, it was still a mixed quarter for the company with a decent beat of analysts’ EPS estimates but a miss of analysts’ Tax Preparation revenue estimates.
"Today we are reaffirming our FY25 outlook," said Jeff Jones, president and chief executive officer.
Unsurprisingly, the stock is down 6.6% since reporting and currently trades at $57.60.
Is now the time to buy H&R Block? Access our full analysis of the earnings results here, it’s free.
Best Q1: 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 $426 million, up 12.7% year on year, outperforming analysts’ expectations by 2.1%. The business had a very strong quarter with EBITDA guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EPS estimates.
Frontdoor delivered the fastest revenue growth and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 30.7% since reporting. It currently trades at $53.70.
Is now the time to buy Frontdoor? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: 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 $331.5 million, down 12.6% year on year, falling short of analysts’ expectations by 9%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.
1-800-FLOWERS delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 15.7% since the results and currently trades at $4.89.
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 $3.46 billion, down 6.5% year on year. This result missed analysts’ expectations by 4.1%. It was a slower quarter as it also recorded full-year EBITDA guidance missing analysts’ expectations and a slight miss of analysts’ organic revenue estimates.
The stock is down 2% since reporting and currently trades at $41.29.
Read our full, actionable report on LKQ here, it’s free.
Carriage Services (NYSE: CSV)
Established in 1991, Carriage Services (NYSE: CSV) is a provider of funeral and cemetery services in the United States.
Carriage Services reported revenues of $107.1 million, up 3.5% year on year. This number beat analysts’ expectations by 2.8%. Zooming out, it was a mixed quarter as it also logged a solid beat of analysts’ EPS estimates but full-year revenue guidance slightly missing analysts’ expectations.
Carriage Services achieved the biggest analyst estimates beat but had the weakest full-year guidance update among its peers. The stock is up 5.7% since reporting and currently trades at $42.17.
Read our full, actionable report on Carriage Services here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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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