Wednesday wasn't an ideal day to hold shares of business consulting services specialist Resources Connection (RGP -4.21%). After releasing quarterly earnings figures after market close on Tuesday, investors assertively sold out on the news that the company missed on the top and bottom lines.

When the smoke cleared, Resource Connection's share price had fallen by almost 12%, comparing quite unfavorably to the ultimately flat performance of the S&P 500 index.

An unimpressive start to fiscal 2025

The market was surely concerned with the double-digit decline in Resources Connection's revenue, not to mention the more dramatic erosion of profitability. The company's first quarter of fiscal 2025 saw it earn revenue just shy of $137 million, nearly 20% down on a year-over-year basis.

Worse, it flipped to a net loss of more than $5.7 million under generally accepted accounting principles (GAAP), against the $3.1 million profit of the year-ago quarter. The news was only slightly better on an adjusted and per-share basis, where the company hit breakeven. Still, in the first quarter of fiscal 2024, it was well in the black at $0.20 per share.

On top of that, Resources Connection's core fundamentals didn't meet the consensus analyst estimates. Pundits tracking the stock were modeling slightly over $146 million for revenue, and adjusted net income of $0.02 per share.

One major reason for the revenue decline was a 33% drop in revenue for its former No. 1 earning segment, on-demand talent, due mainly to a more than 30% decrease in billable hours. That has now fallen to No. 2, behind consulting activities.

Much to prove

In Resources Connection's earnings release, management expressed optimism that a recently enacted restructuring program would bear fruit. It reorganized its business segments to, in its words, "better align with changes in its internal management framework and reporting of financial information which is used for performance assessment and resource allocation."

It will need to prove to investors before long that the move can jump-start top- and bottom-line growth.