Shares of TAL Education Group (NYSE:TAL) fell 11% on Thursday, following the release of its fiscal first-quarter financial results.
The provider of after-school tutoring services in China grew its revenue by 27.6% year over year, to $702.8 million.
TAL Education Group's network of learning centers stood at 725 locations in 57 cities at the end of the second quarter, up from 676 centers at the end of February. The expansion of the company's physical network and online programs is helping to swell its student base. Total student enrollments of normal priced long-term courses jumped 40.6% year over year, to approximately 1.7 million.
"The first quarter's topline results reflected the success of our consistent growth strategy," CFO Rong Luo said in a press release. "We recorded healthy growth of small class business in the cities we currently cover and further scaled our online courses."
TAL Education Group's earnings, however, fell short of analysts' estimates. The company's non-GAAP (adjusted) net income per American depositary share (ADS) came in at $0.03. Analysts had been expecting adjusted earnings per share (EPS) of $0.11.
TAL's guidance also disappointed investors. Management expects second-quarter revenue to increase 28% to 31% to a range of $895.7 million to $916.7 million. That's well below the consensus estimate of $952.4 million.
Still, Luo says TAL Education Group's investments will help to drive long-term growth.
"We will pursue solid, organic, and sustainable expansion of our offline business," Luo said. "At the same time, we will continuously invest in new technology and other initiatives to accelerate our online business development and realize the promising potential of online education."