Carriage Services experienced a challenging third quarter, with revenue and non-GAAP profit both missing market expectations and a significant negative market reaction. Management attributed the underperformance to continued weakness in cemetery preneed sales, particularly concentrated in its California operations and among lower-value contracts. CEO Carlos Quezada acknowledged that the company "parted ways from some basic fundamentals for sales," pointing to recruiting, training, and sales execution as areas in need of improvement. Despite these setbacks, funeral contract volumes improved, with comparable contracts up and average revenue per contract rising modestly, aided by internal efforts to drive volume and pricing.
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Carriage Services (CSV) Q3 2026 highlights:
- Revenue $100.3 million vs S&P analysts’ estimates of $109.5 million (2.4% year-on-year decline, 8.4% miss)
- Adjusted EPS $0.59 vs S&P analysts’ expectations of $0.79 (25.5% miss)
- Adjusted EBITDA $27.71 million vs analyst estimates of $32.98 million (27.6% margin, 16% miss)
- Revenue guidance The company dropped its revenue guidance for the full year to $417.5 million at the midpoint from $440 million, a 5.1% decrease
- Adjusted EPS guidance Management lowered its full-year adjusted EPS guidance to $2.97 at the midpoint, a 13.8% decrease
- EBITDA guidance $127.5 million at the midpoint for the full year, below analyst estimates of $135.3 million
- Operating margin 19%, down from 23.4% in the same quarter last year
- Market capitalization $448 million
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our top 5 analyst questions from Carriage Services’s Q3 earnings call
- Laura Maher (B. Riley Securities) pressed for clarity on whether cemetery sales weakness was isolated or broad-based. CEO Carlos Quezada explained it was "highly concentrated in the California cemeteries," particularly for lower-value contracts, and described targeted efforts to address these gaps.
- Alex Paris (Barrington Research) asked if funeral contract growth would persist in the coming quarter. CFO John Enwright replied that "we anticipate year-over-year growth, slight growth ultimately," adding that easier comparables in the prior year had helped recent performance.
- Scott Schneeberger (Oppenheimer) probed the timeframe for cemetery sales recovery and if productivity improvements would show results. Quezada stated the plan was "already underway" but set expectations for a "full recovery by the first quarter of 2027."
- Parker Snure (Raymond James) inquired about drivers of the step-up in fourth quarter revenue guidance. Enwright detailed that the trust tax adjustment, seasonal funeral volume increases, and contributions from acquisitions would support sequential growth.
- George Kelly (ROTH Capital Partners) questioned how the acquisition pipeline would be financed and the expected impact on leverage. Enwright confirmed funding would come from free cash flow and the credit facility, with leverage remaining in the 4.0–4.1x range post-deals.
Catalysts in upcoming quarters
In the coming quarters, the StockStory team will watch closely for (1) measurable improvement in cemetery preneed sales, particularly in California, (2) successful integration and performance of new acquisitions, and (3) stabilization or improvement in funeral contract volumes and margins. Execution of The Carriage Way initiative and the pace of operational improvements in sales processes will be further signposts to monitor.
Carriage Services currently trades at $27.85, down from $35.98 just before the earnings. Is there an opportunity in the stock? See for yourself in our full research report (it’s free).
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