Shares of Bright Horizons Family Solutions Inc. (NYSE: BFAM) plummeted by 5.30% on November 5th, 2024, despite the company reporting better-than-expected earnings for the third quarter. The childcare services provider's stock faced selling pressure, potentially due to concerns raised by analysts and investors regarding the company's growth prospects and operational challenges.
In its Q3 2024 earnings report, Bright Horizons posted an 11% increase in total revenue to $719 million, driven by strong performance in its backup care and education advisory segments. Adjusted earnings per share (EPS) grew by an impressive 26% to $1.11, surpassing analysts' estimates of $1.06 per share.
However, the company's full-service childcare segment, which accounts for the majority of its revenue, saw enrollment growth in the low single digits, indicating slower-than-desired momentum. Additionally, Bright Horizons closed 10 centers during the quarter, reflecting challenges in certain locations. The bottom cohort of centers, particularly those with occupancy rates below 40%, continued to struggle with improving enrollment, further dampening investor sentiment.
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