As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at specialized consumer services stocks, starting with WeightWatchers (NASDAQ: WW).
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 3.1% 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 $189.2 million, down 6.4% year on year. This print exceeded analysts’ expectations by 6.2%. Overall, it was a very strong quarter for the company with a beat of analysts’ EPS and EBITDA estimates.
“The need for effective and sustainable support in weight health has never been more important, and no company is better positioned to meet that need than WeightWatchers,” said Tara Comonte, CEO of WeightWatchers.
WeightWatchers delivered the weakest full-year guidance update of the whole group. The stock is down 29.2% since reporting and currently trades at $26.98.
Is now the time to buy WeightWatchers? Access our full analysis of the earnings results here, it’s free for active Edge members.
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. The market seems content with the results as the stock is up 2.9% since reporting. It currently trades at $24.76.
Is now the time to buy Matthews? Access our full analysis of the earnings results here, it’s free for active Edge members.
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 significant miss of analysts’ EPS estimates.
As expected, the stock is down 18.4% since the results and currently trades at $31.51.
Read our full analysis of LKQ’s results here.
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 result surpassed analysts’ expectations by 2.3%. It was a strong quarter as it also produced EBITDA guidance for next quarter exceeding analysts’ expectations and full-year EBITDA guidance beating analysts’ expectations.
Frontdoor pulled off the fastest revenue growth among its peers. The stock is up 17.5% since reporting and currently trades at $68.72.
Read our full, actionable report on Frontdoor here, it’s free for active Edge members.
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 $1.29 billion, up 6.8% year on year. This number topped analysts’ expectations by 0.9%. Aside from that, it was a mixed quarter as it also recorded a beat of analysts’ EPS estimates.
The stock is up 4.4% since reporting and currently trades at $8.80.
Read our full, actionable report on ADT here, it’s free for active Edge members.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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