Boyd Group Services Inc. (NYSE: BGSI) had a rough Wednesday. The collision repair chain's stock plummeted more than 11% after its third-quarter results missed Wall Street's expectations on both the top and bottom lines.
The company reported adjusted earnings of 68 cents per share, well below the 85 cents analysts were looking for. Revenue rose 28.2% year over year to $1.013 billion, but that still came in slightly under the $1.021 billion estimate.
President and CEO Brian Kaner pointed to continued market share gains, positive same-store sales growth and margin expansion, supported by the acquisition of Joe Hudson's Collision Center and cost-saving initiatives under Project 360.
Earnings Snapshot
Boyd Group attributed the sales growth to $206 million in contributions from 342 new locations and 2.2% same-store sales growth, compared with 2.4% in the prior-year quarter.
Gross profit rose 29.4% to $473.4 million, while gross margins expanded 40 basis points to 46.7%. That margin improvement was driven by better paint, sublet, scanning and calibration margins, plus cost savings from Project 360 and synergy realization from the Joe Hudson's acquisition. Those gains were partially offset by lower labour and part margins.
Adjusted EBITDA increased 34.3% to $132.1 million, with the adjusted EBITDA margin expanding 60 basis points to 13.0%.
Net earnings, however, declined sharply to $100,000 from $10.8 million, hit by acquisition and transformation costs and higher intangible asset amortization. Adjusted net earnings increased to $19 million from $17.8 million.
Acquisition-Led Expansion and Cost Savings Initiatives
Boyd Group added 10 locations through single-shop acquisitions during the quarter, bringing its collision repair network to 1,329 locations as of Sept. 30, up 31% from 1,014 a year earlier. The company added 258 locations in the U.S. Southeast through its January 2026 acquisition of Joe Hudson's Collision Center, expanding its North American footprint by 25%.
Boyd expects synergies from the acquisition and its Project 360 transformation initiative to generate $140 million in savings from 2025 through 2029. It realized $40 million in 2025 and another $50 million year to date in 2026, with $15 million expected in the fourth quarter and the remaining $35 million by 2029.
Balance Sheet, Outlook
Boyd Group ended September with $28.1 million in cash and total debt outstanding, net of cash, of $2.0 billion.
The company declared a dividend of $3.1 million in the third quarter and paid on Oct. 28. During the quarter, Boyd announced a normal course issuer bid and commenced share repurchases of $14 million.
Management highlighted that the broader industry remained under pressure, with Boyd Group estimating that repairable insurance claims volumes declined approximately 1% to 3% year over year during the quarter.
Boyd Group continued to outperform industry volumes and gain market share in the third quarter, supported by its scale, market density and strong insurer relationships. Higher repair volumes and a modest increase in average repair costs drove 2.2% same-store sales growth, which remained positive in October.
The company expects to open 11 start-up locations in the fourth quarter and plans another 34 over the next 12 months, alongside continued acquisitions and greenfield expansion to deepen its market presence. Management maintained its 2026 outlook for maintenance capital expenditures of 1.6% to 1.8% of sales.
BGSI Price Action: Boyd Group Services shares were down 11.92% at $77.95 at the time of publication on Wednesday. The stock is trading near its 52-week low of $75.42, according to market data.
