Carriage Services 3Q revenue grows over 11% when compared to last year

Here’s what Carriage Services Vice-Chairman and CEO Carlos Quezada said in prepared statements accompanying Carriages Services 3rd Quarter 2024 financial reports, “I am pleased to announce that our growth continues with another strong quarter of performance. Our cemetery sales team achieved a notable increase of 27.1% year-over-year in preneed sales, affirming the continued effectiveness of our cemetery sales growth strategy. Together with an increase of 3.1% in our funeral average revenue per contract, these factors significantly propelled our total revenue, which grew by 11.3% over the same period last year.”

When you look at the numbers delivered by Carriage Services in this report that you can access here you will find 3Q 2024 Revenues at $100.6 million as compared to $90.5 million in 3Q23.  You will also find Operating Income at $22.8 million which is a 22% increase over last year’s $15.6 3Q number.  Finally, you will see Net Income virtually double when compared to 3Q2023 — those numbers are a Net Income of $9.8 million for 3Q24 as compared to $4.6 million for 3Q23.

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  If you follow these Death Care companies like I do you will know that the relatively new management team at Carriage Services, led by CEO Carlos Quezada, has been laser-focused on improving the operational facets of the company.  The 3rd Quarter of 2024 shows that they are on their way to doing so.

As we’ve mentioned, as recently as last Friday’s article, improving margins in a highly inflationary time is difficult.  And, Carriage Services had some of that in this quarter with Field Costs and Expenses moving up about 3.3% in comparison to the 3rd Quarter of 2023.  However, a top-line revenue increase of over $10 million (11.3%) more than made up for those costs and raised the company’s Operating Income margin to 22.7% in comparison to last year’s 3rd Quarter number of 17.3%.

Carriage Services, with this report, has shown what can happen in an business environment with high-fixed costs and less variable costs.  That is, raising ancillary revenue on a fixed-cost operation can yield growing and growing profits.  In my opinion, that is exactly what Carriage Service has done this past quarter.  Doing so has been the exception among Death Care businesses over the past couple of years.

Most of the traditional funeral homes have had the problem that they haven’t been able to raise revenues and the inflationary cost structure of those fixed-costs has lessened their profit margins.  When you look at Carriage Services’ “Overhead as a Percentage of Revenue”, which is a number they calculate in their financials, it has actually dropped from 14.2% in 3Q23 to 14.1% in 3Q24.

That number didn’t go down because the overhead got less expensive, the ratio went down because they added incremental sales revenue.  Quite frankly, most of that incremental sales were done on the cemetery side of the operations.  For the 9-months through September 30, 2024, Carriage Services has seen about a $21 million increase (28.3%) in Cemetery Operations revenue as compared to the Cemetery Operations revenue of the same period in 2023.

Disclaimer — The author of this article for Funeral Director Daily holds a stock position in Carriage Services.

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