Let’s dig into the relative performance of LKQ (NASDAQ: LKQ) and its peers as we unravel the now-completed Q2 specialized consumer services earnings season.
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 3.7% since the latest earnings results.
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. This print was in line with analysts’ expectations, but overall, it was a softer quarter for the company with full-year EPS guidance missing analysts’ expectations and a significant miss of analysts’ EPS estimates.
“As we look ahead, we are focused on executing on our strategic initiatives to deliver improved financial results. We will continue to follow a disciplined capital allocation strategy that returns capital to shareholders. Our strategy includes driving efficiencies and simplifying our business and portfolio as we look at ROIC as a constant measure. We are navigating through the cyclical issues in our marketplace and will have a stronger Company that is well-positioned when the market turns,” stated Rick Galloway, Senior Vice President and Chief Financial Officer.
Unsurprisingly, the stock is down 17.9% since reporting and currently trades at $31.70.
Read our full report on LKQ 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 delivered the biggest analyst estimates beat among its peers. The market seems content with the results as the stock is up 4.7% since reporting. It currently trades at $25.18.
Is now the time to buy Matthews? Access our full analysis of the earnings results here, it’s free.
Mister Car Wash (NASDAQ: MCW)
Formerly known as Hotshine Holdings, Mister Car Wash (NYSE: MCW) offers car washes across the United States through its conveyorized service.
Mister Car Wash reported revenues of $265.4 million, up 4.1% year on year, falling short of analysts’ expectations by 2.3%. It was a slower quarter as it posted a significant miss of analysts’ EPS estimates and a miss of analysts’ same-store sales estimates.
Mister Car Wash delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 13.9% since the results and currently trades at $5.29.
Read our full analysis of Mister Car Wash’s results here.
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 $1.07 billion, up 3% year on year. This print beat analysts’ expectations by 1.3%. Taking a step back, it was a satisfactory quarter as it also produced full-year EPS guidance topping analysts’ expectations.
The stock is up 10.7% since reporting and currently trades at $83.68.
Read our full, actionable report on Service International here, it’s free.
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 $189.2 million, down 6.4% year on year. This number topped analysts’ expectations by 6.2%. Overall, it was a very strong quarter as it also recorded a beat of analysts’ EPS and EBITDA estimates.
WeightWatchers had the weakest full-year guidance update among its peers. The stock is down 31.8% since reporting and currently trades at $26.
Read our full, actionable report on WeightWatchers 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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