Matthews (NASDAQ:MATW) Surprises With Q4 CY2025 Sales

Diversified solutions provider Matthews International (NASDAQ:MATW) reported revenue ahead of Wall Streets expectations in Q4 CY2025, but sales fell by 29.1% year on year to $284.8 million. Its non-GAAP loss of $0.19 per share was significantly below analysts’ consensus estimates.

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Company Overview

Originally a death care company, Matthews International (NASDAQ:MATW) is a diversified company offering ceremonial services, brand solutions and industrial technologies.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Matthews’s demand was weak and its revenue declined by 1.9% per year. This wasn’t a great result and suggests it’s a low quality business.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Matthews’s recent performance shows its demand remained suppressed as its revenue has declined by 14.3% annually over the last two years.

This quarter, Matthews’s revenue fell by 29.1% year on year to $284.8 million but beat Wall Street’s estimates by 0.8%.

Looking ahead, sell-side analysts expect revenue to decline by 21.4% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and implies its products and services will see some demand headwinds.

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Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Matthews’s operating margin has been trending up over the last 12 months and averaged 7% over the last two years. The company’s higher efficiency is a breath of fresh air, but its suboptimal cost structure means it still sports inadequate profitability for a consumer discretionary business.

In Q4, Matthews generated an operating margin profit margin of 34.2%, up 32.6 percentage points year on year. This increase was a welcome development, especially since its revenue fell, showing it was more efficient because it scaled down its expenses.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Sadly for Matthews, its EPS declined by 22% annually over the last five years, more than its revenue. However, its operating margin actually improved during this time, telling us that non-fundamental factors such as interest expenses and taxes affected its ultimate earnings.

In Q4, Matthews reported adjusted EPS of negative $0.19, down from $0.14 in the same quarter last year. This print missed analysts’ estimates. We also like to analyze expected EPS growth based on Wall Street analysts’ consensus projections, but there is insufficient data.

Key Takeaways from Matthews’s Q4 Results

It was encouraging to see Matthews beat analysts’ EBITDA expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. On the other hand, its EPS missed. Overall, this quarter could have been better. The stock remained flat at $26.46 immediately after reporting.

Is Matthews an attractive investment opportunity at the current price? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).