On August 13, KinderCare Learning Companies (NASDAQ:KLC) reported second-quarter results that captured the company in the middle of major surgery on itself.
Revenue slipped 0.4% to $697.5 million, and the company swung to a net loss of $8.8 million from net income of $38.6 million a year earlier
Behind those numbers sits a deliberate choice: management is closing dozens of underperforming centers even as the core business absorbs the hit. Where The Real Growth Hides The clearest bright spot is Champions, KinderCare’s before- and after-school program, where revenue climbed 13.4% to $59.4 million on 85 net new sites added over the past year, marking four straight quarters of double-digit growth for the segment. KinderCare for Employers added new corporate partners during the quarter, including a stretch providing 24-hour childcare for Dallas public safety workers during the World Cup, and management is leaning further into tuition benefit programs as employers look for ways to support working parents.
The center closures are framed as addition by subtraction. Ninety percent of the locations shut so far sit in the lowest-performing fifth of the portfolio, and the 49 centers closed this quarter averaged occupancy below 37%. Management expects the full round of 80 to 85 closures to lift occupancy by roughly 1.5 percentage points once complete, while trimming annual rent by about $7 million.