Advantage Solutions (NASDAQ:ADV) Announces Quarterly Earnings Results, Misses Expectations By $1.86 EPS

Advantage Solutions (NASDAQ:ADV) released its earnings results on Wednesday. The company reported ($1.96) earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of ($0.10) by ($1.86), FiscalAI reports. The business had revenue of $913.74 million during the quarter, compared to the consensus estimate of $899.50 million. Advantage Solutions had a negative net margin of 7.65% and a negative return on equity of 48.15%.

Here are the key takeaways from Advantage Solutions’ conference call:

• Third-quarter performance was mixed: revenue rose 1% year over year, but Adjusted EBITDA fell 12%. Branded Services remained the main drag, with revenue down 11% and Adjusted EBITDA down 55% amid client losses and unfavorable mix.
• Experiential Services revenue grew 12%, and management expects double-digit revenue and Adjusted EBITDA growth with margin expansion in the fourth quarter and full year. Retailer Services Adjusted EBITDA rose 43%, or more than 30% excluding a tariff-refund benefit.
• The company is restructuring to simplify its organization and expects about $25 million in annualized net savings, with more than $5 million in additional savings over time. Most near-term actions are expected in the fourth quarter, while restructuring costs are estimated at $7 million–$10 million.
• Advantage reiterated full-year guidance for flat to low-single-digit revenue growth and Adjusted EBITDA flat to down mid-single digits, while citing increased uncertainty around consumer spending and project timing. It also reiterated $250 million–$275 million in Adjusted Unlevered Free Cash Flow guidance; net leverage was 4.6 times at quarter-end.

Advantage Solutions Trading Up 29.6%

NASDAQ ADV traded up $8.64 during mid-day trading on Wednesday, reaching $37.79. 148,614 shares of the stock were exchanged, compared to its average volume of 83,541. Advantage Solutions has a one year low of $12.23 and a one year high of $47.45. The stock has a 50 day simple moving average of $30.89 and a 200-day simple moving average of $30.17. The stock has a market cap of $484.42 million, a P/E ratio of -1.77 and a beta of 2.21. The company has a debt-to-equity ratio of 3.77, a current ratio of 1.79 and a quick ratio of 1.79.

Wall Street Analyst Weigh In

A number of brokerages have weighed in on ADV. Zacks Research upgraded shares of Advantage Solutions from a “strong sell” rating to a “hold” rating in a research report on Monday, October 5th. Wall Street Zen downgraded shares of Advantage Solutions from a “hold” rating to a “sell” rating in a report on Saturday, August 8th. Weiss Ratings reiterated a “sell (d-)” rating on shares of Advantage Solutions in a research note on Friday. Finally, Morgan Stanley cut their price objective on Advantage Solutions from $35.00 to $34.00 and set an “equal weight” rating on the stock in a report on Thursday, August 6th. One equities research analyst has rated the stock with a Buy rating, two have assigned a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat, the stock presently has an average rating of “Hold” and a consensus target price of $42.00.

Advantage Solutions Company Profile

Advantage Solutions Inc is a provider of outsourced sales and marketing services for consumer goods manufacturers, retailers and other brands. The company helps clients improve how their products are presented, promoted and sold across retail, e-commerce and other consumer channels.

Its services include retail merchandising, sales representation, brand marketing, experiential marketing, digital and omnichannel marketing, category management, analytics and business intelligence. Advantage Solutions also provides services designed to support product launches, in-store execution, shopper engagement and connections between brands and consumers.

The company serves clients primarily in the United States and Canada, working across categories such as food and beverage, consumer packaged goods, health and wellness, beauty and household products.