Service International Stock Earnings Reports

SCI reported Q1 2026 adjusted EPS of $0.97 (vs. $0.96 prior year). Cemetery revenue and gross profit showed meaningful strength, driven by double-digit preneed cemetery sales production (comparable cemetery revenue +7% and preneed cemetery sales +10%). Funeral revenue and gross profit declined, driven by a mid-single-digit drop in case volumes (core funeral services down ~6.6%), partially offset by a 3.5% increase in core average revenue per service and disciplined cost control. Management reaffirmed 2026 normalized EPS guidance of $4.05–$4.35 and confirmed 2026 adjusted operating cash flow guidance of $1.0B–$1.06B. Q1 operating cash flow was strong at $335M. Capital deployment included $108M of capex (maintenance, growth, and acquisitions) and $190M returned to shareholders (share repurchases $143M, dividends $47M). Net leverage was ~3.68x and liquidity ~ $1.7B (cash $260M, $1.45B available on credit). Trust fund returns were down 0.7% in Q1 but recovered ~4–5% in April, supporting a full-year trust return expectation of ~7%. Management emphasized preneed momentum (funeral and cemetery), continued focus on sales initiatives (seminars, headcount, lead quality), disciplined expense management, and confidence that funeral volume weakness stems from transitory mortality/seasonality factors rather than market share loss. They expect funeral volumes to moderate to a 1–3% decline for the full year and cemetery to deliver mid-single-digit growth, with cemetery gross margins expected to expand and funeral gross margins modestly down for the year.