KinderCare misses, updates 2026 guidance for revenue hit, margin gains from center consolidations

KinderCare misses Q2 2026 estimates with EPS $0.08 and updates 2026 guidance for revenue hit, margin gains from center consolidations

• Non-GAAP EPS $0.08 declined 64% YoY, causing KinderCare Learning to miss Q2 2026 earnings estimates.
• Q2 revenue totaled $697.5M, roughly flat year over year, modestly below estimates and prior-year level.
• Revenue $698M, slightly below last year, as enrollment softness offset by pricing and B2B.
• Adjusted EBITDA $63M and adjusted EPS $0.08, both down significantly YoY on lower occupancy.
• Full-year guidance updated: revenue $2.66–$2.70B, adjusted EBITDA $200–$220M, adjusted EPS $0.05–$0.15.
• Guidance incorporates $57M annualized revenue headwind but $8M EBITDA benefit from 80–85 center consolidations.
• Same-center occupancy 68.6%, down 240 basis points YoY, with total enrollment declining 4%.
• Champions revenue grew 13% YoY, while Learning Adventures enrichment revenue nearly doubled versus last year.
• Crim premium brand strengthening, with summer camp enrollment up ~26% and expansion into California underway.
• Gross margin not disclosed; SG&A improved to 10.5% of revenue, down 76 basis points YoY.
• Free cash flow expected below $10M in 2026, pressured by $20–$25M lease exit payments.
• Management tone optimistic: confident optimization improves 2027 positioning but acknowledging near-term volatility and weaker earnings.
• Main concern: Ongoing enrollment weakness and execution risk around center consolidations and lease exits.
• Mixed quarter, driven by enrollment softness offset by B2B growth and pricing.

https://finviz.com/stock?t=KLC&p=d#:~:text=KinderCare%20misses%20Q2,and%20pricing.