Let's dig into the relative performance of LKQ (NASDAQ:LKQ) and its peers as we unravel the now-completed Q1 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 Q1; on average, revenues beat analyst consensus estimates by 0.6%. while next quarter's revenue guidance was in line with consensus. Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. But the beginning of 2024 has seen more volatile stock performance due to mixed inflation data, and while some of the specialized consumer services stocks have fared somewhat better than others, they collectively declined, with share prices falling 5% on average since the previous earnings results.
Weakest Q1: 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 $3.70 billion, up 10.6% year on year, falling short of analysts' expectations by 1.6%. It was a weak quarter for the company with a miss of analysts' earnings and organic revenue estimates.
“Confronted with soft demand, our Wholesale – North America team accelerated our FinishMaster footprint rationalization by consolidating 65 branches in the first quarter. To date, we have consolidated a total of 99 branches, representing 66% of the acquired locations, which is more than we anticipated completing in the first three-years. Through this effort, our team uncovered additional opportunities for synergies, which has given us the confidence to increase our previously disclosed synergies from $55 million to $65 million,” said Justin Jude, Executive Vice President and Chief Operating Officer.
LKQ achieved the fastest revenue growth of the whole group. The stock is down 14.1% since reporting and currently trades at $42.
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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 $378 million, up 3% year on year, in line with analysts' expectations. It was a decent quarter for the company with an impressive beat of analysts' earnings estimates but a miss of analysts' home service plans estimates.
The market seems happy with the results as the stock is up 9.9% since reporting. It currently trades at $33.8.
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 $379.4 million, down 9.1% year on year, falling short of analysts' expectations by 1.2%. It was a weak quarter for the company with a miss of analysts' earnings estimates. Its revenue, operating margin, and EPS fell short of Wall Street's estimates.
Interestingly, the stock is up 5.9% since the results and currently trades at $9.57.
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 $1.05 billion, up 1.6% year on year, surpassing analysts' expectations by 2.7%. Looking more broadly, it was a good quarter for the company with a decent beat of analysts' earnings estimates.
The stock is down 1% since reporting and currently trades at $70.68.
ADT (NYSE:ADT) Founded in 1874 and headquartered in Boca Raton, Florida, ADT (NYSE:ADT) is a provider of security, automation, and smart home solutions, offering comprehensive services for home and business protection.
ADT reported revenues of $1.21 billion, down 5.3% year on year, in line with analysts' expectations. Looking more broadly, it was a decent quarter for the company with an impressive beat of analysts' earnings estimates but a miss of analysts' customers estimates.
The stock is up 12.7% since reporting and currently trades at $7.17.
This content was originally published on Stock Story
