Rollins misses profit, sales estimates on slow demand for pest control services

Shares fell more than 13% to $37.5 in extended trading following the results.

Pest control firm Rollins fell short of Wall Street estimates for second-quarter revenue and profit on Wednesday, as consumers reduced spending on pest control services amid ongoing macroeconomic uncertainty.

Sticky inflation and high interest rates have led residential and commercial customers to scale back spending on routine services, pressuring pest control and maintenance companies after several quarters of steady demand.

• "Our second-quarter results fell short of our expectations due to slower growth in parts of our residential pest control business," CEO Jerry Gahlhoff said.
• The company said demand trends softened during the quarter, while its cost structure remained positioned for a stronger growth environment entering peak season.
• The company's revenue for the quarter ended June 30 was $1.08 billion, missing analysts' average estimate of $1.09 billion, according to data compiled by LSEG.
• The Atlanta, Georgia-based company's adjusted profit per share was 32 cents, compared with expectations of 34 cents.
• Rollins reported a second-quarter adjusted operating margin of 19.5%, down 110 basis points from 20.6% a year earlier.
• Peer Ecolab in April had forecast a weak second-quarter profit due to surging commodity prices amid global supply-chain disruptions. It is expected to report its results on July 28.