Carriage Services: A Funeral Industry Standout in Q3 2024

Carriage Services, Inc. (NYSE: CSV) has announced its third quarter 2024 results, showcasing a strong performance and an increased full-year outlook. The company, a leading provider of funeral and cemetery services in the United States, reported impressive growth in revenue and earnings, driven by strategic initiatives and effective cost management.

Carriage Services' revenue growth in Q3 2024 was distributed between its funeral and cemetery services, with the cemetery segment contributing significantly to the overall growth. Cemetery preneed sales surged by 27.1% year-over-year, while funeral average revenue per contract increased by 3.1%. This resulted in a 11.3% overall revenue growth to $100.7 million. The cemetery segment's strong performance, with a 30.5% adjusted EBITDA margin, contributed significantly to the company's overall growth and profitability.


Carriage Services' operating margins have been on an upward trajectory, with a notable improvement from 17.3% in Q3 2023 to 22.7% in Q3 2024. This increase can be attributed to a combination of factors, including effective cost management and strategic pricing strategies. The company has successfully managed to increase its average revenue per funeral contract by 3.1% and cemetery preneed sales by 27.1%, contributing to a 11.3% growth in total revenue. Additionally, diligent cost management has led to a 26.7% increase in Adjusted Consolidated EBITDA, with the margin improving by 373 basis points to 30.5%. This demonstrates Carriage Services' ability to balance pricing strategies and cost structures, driving strong financial performance and margin growth.


Carriage Services' debt-to-equity ratio has been on a downward trend, indicating improved financial health. In Q3 2024, the ratio stood at 4.3x, down from 5.3x in the same period last year. This reduction reflects the company's debt repayment efforts, with $15.0 million paid down during the quarter. Despite this, the current ratio remains higher than the industry average, suggesting room for further improvement.

Carriage Services' adjusted consolidated EBITDA growth of 26.7% in Q3 2024 was driven by a 27.1% increase in cemetery preneed sales and a 3.1% increase in funeral average revenue per contract. These factors contributed to a 11.3% increase in total revenue, marking the third consecutive quarter of exceeding $100 million. The company's strategic approach to preneed funeral sales also yielded remarkable results, with preneed funeral commission income surging by 415.4%. This significant revenue boost, along with diligent cost management, contributed to the Adjusted Consolidated EBITDA margin improvement of 373 basis points to 30.5%.

Carriage Services' strong Q3 2024 results reflect the company's strategic focus on preneed funeral sales, cemetery sales growth, and effective cost management. The company's ability to drive revenue growth and improve margins, despite the cyclical nature of the funeral industry, demonstrates its resilience and potential for long-term growth. Investors should consider Carriage Services as a solid addition to their portfolios, given its strong fundamentals, strategic positioning, and potential for substantial returns over time.