Boyd Group Services falls short of Q2 forecasts despite revenue rise

Boyd Group Services Inc. reported second-quarter revenue of C$689.7 million, up 7.1% from C$644.1 million in the same period last year. The Canadian auto body repair and collision services provider attributed the increase to higher vehicle repair volumes and pricing adjustments.

Earnings per share, however, fell short of market expectations. Adjusted diluted EPS came in at C$1.23, below the C$1.35 consensus estimate compiled by Refinitiv. Net income for the quarter totaled C$42.1 million, a 5.8% rise compared with C$39.8 million in Q2 2023.

The company cited ongoing labor shortages and elevated material costs as headwinds that weighed on profitability despite revenue growth. Boyd Group also noted that insurance provider reimbursement rates have not kept pace with inflation, further pressuring margins.

Management reaffirmed its full-year guidance, projecting revenue of C$2.7 billion to C$2.8 billion and adjusted diluted EPS of C$5.25 to C$5.75. The outlook assumes stable industry repair volumes and no significant deterioration in cost pressures.

Shares of Boyd Group were down 3.2% in pre-market trading following the results, extending losses from the previous session. The stock has declined 12% year-to-date amid broader market volatility and sector-specific challenges.

Analysts at National Bank Financial maintained a Sector Perform rating on the stock, citing the company's resilient revenue growth but warning that margin compression could persist in the near term.