KinderCare Learning Companies (NYSE:KLC) Issues Quarterly Earnings Results, Misses Estimates By $0.02 EPS

KinderCare Learning Companies (NYSE:KLC) posted its earnings results on Thursday. The company reported $0.08 earnings per share for the quarter, missing analysts’ consensus estimates of $0.10 by ($0.02), FiscalAI reports. The company had revenue of $697.52 million for the quarter, compared to the consensus estimate of $697.94 million. KinderCare Learning Companies had a positive return on equity of 6.06% and a negative net margin of 17.23%.The business’s quarterly revenue was down .4% compared to the same quarter last year. During the same period in the previous year, the firm posted $0.22 EPS. KinderCare Learning Companies updated its FY 2026 guidance to 0.050-0.150 EPS.

Here are the key takeaways from KinderCare Learning Companies’ conference call:

• Negative Sentiment: Second-quarter revenue declined slightly to $698 million, while total enrollment fell 4% year over year, same-center occupancy dropped to 68.6%, and Adjusted EBITDA declined to $63 million from $82 million.
• Negative Sentiment: KinderCare is accelerating footprint optimization, with 49 centers closed in Q2 and 80–85 expected to be closed by year-end. The closures are expected to create an annualized $57 million revenue headwind, while remaining lease exits may require $20–$25 million in cash payments and could extend into 2027.
• Negative Sentiment: Full-year guidance was reduced to revenue of $2.66–$2.70 billion, Adjusted EBITDA of $200–$220 million, Adjusted EPS of $0.05–$0.15, and free cash flow below $10 million. Management also lowered its expected tuition contribution to revenue growth to 2.5% from 3% due to slower state subsidy reimbursement increases.
• Positive Sentiment: The company reported continued momentum in its growth businesses: Champions revenue rose 13% year over year, supported by 85 net new sites since Q2 2025, while KinderCare for Employers, Learning Adventures, and newer centers broadened the revenue mix.
• Positive Sentiment: Management said marketing, simplified center-director responsibilities, and a new AI-assisted enrollment program are improving inquiries and tour quality. Crème de la Crème summer-camp enrollment increased approximately 26%, and the company opened its first California location in Irvine shortly after quarter-end.

KinderCare Learning Companies Price Performance

KLC stock opened at $2.58 on Friday. The stock has a market capitalization of $306.14 million, a PE ratio of -0.65 and a beta of 4.00. KinderCare Learning Companies has a 1 year low of $1.75 and a 1 year high of $7.77. The company’s 50-day moving average is $4.70 and its 200-day moving average is $3.96. The company has a debt-to-equity ratio of 1.95, a current ratio of 0.74 and a quick ratio of 0.73.

Institutional Trading of KinderCare Learning Companies

Several hedge funds have recently added to or reduced their stakes in KLC. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. grew its stake in shares of KinderCare Learning Companies by 6.5% during the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 16,811 shares of the company’s stock valued at $195,000 after buying an additional 1,025 shares during the last quarter. Legal & General Group Plc boosted its holdings in KinderCare Learning Companies by 20.2% during the 2nd quarter. Legal & General Group Plc now owns 30,909 shares of the company’s stock valued at $312,000 after acquiring an additional 5,192 shares during the period. Rhumbline Advisers grew its position in KinderCare Learning Companies by 32.1% during the 2nd quarter. Rhumbline Advisers now owns 44,209 shares of the company’s stock worth $447,000 after acquiring an additional 10,735 shares during the last quarter. Russell Investments Group Ltd. bought a new position in KinderCare Learning Companies during the 2nd quarter worth approximately $270,000. Finally, Invesco Ltd. increased its stake in KinderCare Learning Companies by 48.0% in the 2nd quarter. Invesco Ltd. now owns 33,698 shares of the company’s stock worth $340,000 after purchasing an additional 10,932 shares during the period.

Analyst Upgrades and Downgrades

A number of analysts have recently commented on KLC shares. Robert W. Baird lifted their price target on KinderCare Learning Companies from $1.50 to $4.00 and gave the company a “neutral” rating in a research note on Friday, May 15th. BMO Capital Markets raised their price objective on KinderCare Learning Companies from $4.00 to $6.00 and gave the stock an “outperform” rating in a research report on Monday, May 18th. Wall Street Zen lowered KinderCare Learning Companies from a “hold” rating to a “sell” rating in a research note on Saturday, May 16th. JPMorgan Chase & Co. cut KinderCare Learning Companies from a “neutral” rating to an “underweight” rating in a report on Friday. Finally, UBS Group decreased their price objective on shares of KinderCare Learning Companies from $5.00 to $4.50 and set a “neutral” rating for the company in a research report on Friday. One research analyst has rated the stock with a Buy rating, five have given a Hold rating and four have given a Sell rating to the company. According to MarketBeat.com, the stock has a consensus rating of “Reduce” and a consensus price target of $4.13.

Key Stories Impacting KinderCare Learning Companies

Here are the key news stories impacting KinderCare Learning Companies this week:

• Positive Sentiment: KinderCare is pursuing “footprint optimization,” including plans to close approximately 80–85 centers in 2026. Management expects the restructuring to improve operating efficiency and better align its center network with demand. KinderCare 2026 outlook and center closures
• Neutral Sentiment: Holzer & Holzer announced an investigation into whether KinderCare complied with federal securities laws after the earnings disclosure and subsequent stock decline. The announcement does not allege wrongdoing or indicate that a regulatory action has been filed, but it adds potential legal and headline risk. KLC investor investigation announcement
• Negative Sentiment: Second-quarter adjusted earnings were $0.08 per share, below the $0.10 consensus estimate and down from $0.22 a year earlier. Revenue of $697.5 million was slightly below expectations and declined 0.4% year over year. The company also reported an $8.8 million net loss. KinderCare misses second-quarter earnings estimates
• Negative Sentiment: Adjusted EBITDA fell to $63 million from $82 million a year earlier, reflecting lower occupancy and weaker operating leverage. Management reduced its 2026 adjusted EPS outlook to $0.05–$0.15, below the $0.20 analyst consensus, while forecasting revenue of approximately $2.66–$2.70 billion. KinderCare lowers 2026 outlook
• Negative Sentiment: JPMorgan downgraded KinderCare from “neutral” to “underweight,” adding further pressure to investor sentiment following the earnings miss and guidance reduction.

About KinderCare Learning Companies

KinderCare Learning Companies Inc is a provider of high-quality early childhood education by center capacity. KinderCare Learning Companies Inc is based in PORTLAND, Ore.