KinderCare Learning Companies (KLC +2.81%) stock tumbled 18.1% through 11:05 a.m. ET Thursday after reporting mixed results in its Q3 2025 financial report last night.
Analysts expected KinderCare to earn $0.12 per share on $682.6 million in sales for the quarter, and KinderCare actually earned $0.13 per share on sales of only $676.8 million.
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KinderCare Q3 earnings
KinderCare grew its Q3 earnings less than 1% year over year, with almost all the growth coming from sites providing "before- and after-school" services -- basically, babysitting work. Revenue from early childhood education centers, on the other hand, grew just 0.1%, suggesting customers may not be seeing a lot of value in the education KinderCare provides.
Operating profits declined by more than half in the quarter, and net profit fell by nearly three-quarters. The "$0.12" profit KinderCare supposedly earned was only a non-GAAP number. Actual earnings as calculated according to generally accepted accounting principles (GAAP) were only $0.04 per share, down dramatically from $0.15 per share earned a year ago.
Despite the depressing numbers, CEO Paul Thompson insisted his company's Q3 results "reflect disciplined execution and continued operational progress through the back-to-school season."
NYSE: KLC
Key Data Points
Is KinderCare stock a buy?
Investors don't seem to agree with that assessment, however, and the company's revised guidance suggests they're right to be skeptical.
KinderCare cut revenue guidance to just over $2.7 billion for this full year, and said its non-GAAP profit will range from only $0.64 to $0.67. Analysts are looking for at least $0.77 per share, however, and when you consider that GAAP profit is almost certain to look worse than the non-GAAP number, it's clear KinderCare is heading for another miss.
Even at just $4 a share, KinderCare looks like a sell to me.
