Ashworth Market Brief: Week of October 31 to November 6, 2026. Two public companies cut guidance. Mortality stayed soft. And preneed kept growing anyway.
Week of October 31 to November 6, 2026. Two public companies cut guidance. Mortality stayed soft. And preneed kept growing anyway.
That tension is the whole story this week, and if you are running an independent funeral home, it is worth reading carefully because it tells you exactly where the opening is.
SCI reported Q3 revenue of $1.11 billion, up 4.6 percent, and adjusted earnings per share of $0.97, up 11 percent. Good numbers on the surface. Underneath them: core funeral volumes fell 0.5 percent in Q3 and 3.1 percent year to date, and October stayed soft. Full-year EPS guidance came down to a midpoint around $3.99, from a prior midpoint of $4.20. Fixed costs rose 4.1 percent on healthcare, fuel, and selling. They spent $34 million on acquisitions in Michigan, Illinois, Florida, and Indiana against a $75 to $125 million target for the year. If you have seen the number “72.6% guidance cut” floating around this week, that is wrong. The actual cut is roughly 5 percent.
Carriage Services was more direct about it. Revenue guidance cut to $415 to $420 million from $435 to $445 million. EPS guidance cut to $2.90 to $3.05 from $3.35 to $3.50. Gross margin dropped from 35.27 percent to 31.17 percent. The causes they named: low mortality, weak cemetery preneed, and trust taxes. Funeral Director Daily noted that Carriage is at least the second public company to reduce guidance this cycle, and that consumers are shifting toward direct cremation. That last point is not a surprise. It is a trend you already know. What matters is what you do with it.
Here is the part that should get your attention. While both companies trimmed their volume and revenue outlooks, while pre-need kept moving. SCI funeral preneed sales rose 6 percent in Q3, roughly $19 million. Cemetery preneed rose 5 percent, and year to date cemetery preneed is running 7.5 percent ahead of last year. Management credited more counselors, more seminar and lunch-and-learn activity, targeted marketing, and digital lead generation. SCI’s preneed backlog now sits at $18 billion. They expect the momentum to continue into 2027, driven by baby boomers aging into the highest mortality bracket. If you’d like to see the report I obtained about these trends while at NFDA, send me a note and I’ll send it your way.
Carriage told a different story on the preneed side. Insurance-funded preneed contracts rose 7 percent, which is real production growth. But cemetery revenue fell 7.8 percent on weaker preneed property sales. They attribute that to families pulling back on discretionary purchases in a tight economy. People will still fund a plan. They are just less willing to buy cemetery property as a speculative purchase when money is tight.
The practical read on all of this: at-need volume is soft industry-wide. Preneed is growing for the operators who are actively working it. Those are two things happening at the same time, and they are connected. You must spend time here. Owners who have built pre-need infrastructure are cushioning the volume softness. Owners who have not are feeling every dip.
SCI also made a compensation move worth noting. They shifted cemetery counselors to guaranteed hourly wages to cut turnover. Added 100 basis points to selling compensation. That cost roughly $2 million over plan in Q3 and will produce a similar drag in Q4, with the expectation that it eases in late 2027. The reason the earnings lag is structural: selling costs hit the income statement immediately, but cemetery preneed revenue is deferred. So you feel the investment before you see the return. SCI knows that and is absorbing it deliberately because they have done the math on what counselor turnover was costing them.
If you have ever watched a good preneed agent walk out the door because someone did not protect the relationship, you already understand what SCI just paid $2 million to fix. What are you willing to invest?
NGL Insurance announced that growth rates on most preneed products will increase for new sales starting January 6, 2027. Worth knowing when you are having conversations with families about funding options. But remember, you have a much bigger opportunity when you don’t rely on carrier growth and you take all the commissions up-front. I’ve built a model to show you this reality. If you want to see it, shoot me a DM on Linkedin or call me at the VIP desk in Madison: 608-845-2252
Now to the Connecticut story, because it matters.
Philip Pietras pleaded guilty to taking approximately $1.2 million from more than 170 preneed clients in Connecticut. The money went largely to gambling. Sentencing is set for January 22, 2027. This is the kind of case that lands on the front page of a local paper, and when it does, families in your market read it and wonder whether their own prepaid arrangement is safe. That is a conversation you should be ready to have before they ask. Know where your funds are held. Know your state’s trust requirements. Know what you would tell a family who calls you worried after reading a story like that one. If you cannot answer those questions cleanly, that is work to do now. And producing a clean and informative blog post for your website on this topic, especially if you’re in Connecticutt, would be a good idea too.
Pennsylvania added its own cautionary note this week. A Westmont funeral home is facing a stop-work order over an unapproved crematory roof opening, with a zoning hearing set for November 24. These are the kinds of regulatory headaches that come from moving fast without documentation in place. Worth a reminder to stay ahead of your own compliance.
On the hospice side, the DOJ arrested six people in connection with a $138 million California hospice fraud case. A Harvard-led study connected private equity hospice buyouts to higher Medicare spending and fewer social work visits. The CMS hospice enrollment moratorium is set to expire November 13. None of this is directly your business, but families navigating end-of-life care are your community. When hospice becomes a source of distrust, the relationships that survive it are the ones families built before the crisis.
NFDA Charlotte brought 5,684 attendees. Chptr won the Innovation Award for its local media distribution network, now reaching more than 200 outlets and working with over 400 homes. They also launched ChptrOne, a managed marketing service. A word of caution here...the industry as a whole loves to tell you how fantastic an opportunity something like this is. The big question here is who owns that distribution network and if that’s not YOU and your funeral home, how do you really benefit from what they’re offering. Ask the tough questions.
NFDA launched a peer Connection Hub focused on ownership and staffing. The keynote framed the consumer as increasingly “frictionless,” which is real. But operators in that room reported that families still want human reassurance, that the technology gets them to your door and the person in the room is what keeps them there. Don’t ever forget this and also know that I’m working on a very specific part of this - the hub of it actually - and if you’d like to hear more about it, you know where to find me...
That is not a reason to dismiss the technology. It is a reason to understand what the technology is actually for; and how you and your funeral home can leverage the benefits.
Passare launched what they are calling the funeral profession’s first MCP server. MCP stands for Model Context Protocol. The plain-English version: it is a standard that lets AI tools connect directly to Passare’s case, contract, and payment data without custom code for each new connection. Right now this is aimed at developers and technology partners building on the Passare platform. It is not something you switch on by Friday. Think of it as the first door opening in a hallway that is going to get a lot of traffic. The vendors who are thinking about this now are the ones you want working with your business. Worth asking every vendor you work with: do you have an MCP server, or a plan to build one?
Dead Ringers introduced HelloIQ, set for 2027, which tracks calls from search through to contract and flags unmanaged leads. The practical implication is straightforward: you cannot work leads you do not know about. A system that tells you which calls never converted to a conversation, and which inquiries went quiet, is a system that finds money you were already leaving behind.
On the independent side, Symonds Family Chapels out of Elgin, Illinois, 105 years in the business, acquired Kahle-Moore in Cary. That is what intelligent growth looks like for a family-owned operation. Scale by staying within your culture and your community relationships rather than getting picked off or coasting.
Ontario is facing a projected gap of about 800 funeral workers over the next ten years, with roughly 3,000 retirements expected against approximately 2,200 new entrants. Paid concurrent internships are the response they are building toward. The OGR Foundation has six $10,000 mortuary science scholarships with applications closing December 31. If you have staff or candidates who qualify, that is worth passing along.
Park Lawn bought the business assets of a historic Texas funeral home this week, another reminder that consolidators are moving through exactly the kind of markets most independents are sitting in. Funeral Director Daily’s October roundup highlighted profitability work under the heading “Margin Repair” and raised a point I want to leave you with: a home’s reputation may track its preneed provider. The families in your community are not distinguishing between your funeral home and the carrier or trust behind your prepaid program. If something goes wrong upstream, they are calling you. That is a reason to know your carrier, your trust arrangement, and your compliance posture the way you know your own price list.
One more pricing reference worth having in your back pocket. NFDA’s 2023 price study puts the median burial funeral at $8,300, or $9,995 with a vault. Cremation with viewing runs $6,280. The basic services fee median is $2,459. Direct cremation averages $1,924, per Funeralocity. These are national medians. Your market will vary. But families are researching, comparing, and forming opinions before they ever call you. They deserve honest numbers and they are going to find them one way or another.
Passages reports that offering bamboo or jute cremation containers lifted average sale per family 30 percent, based on their own case studies. UCF research adds that human composting is now legal in 14 states and aquamation is growing, with cemeteries redesigning to accommodate cremated remains. These are not niche conversations anymore. They are what a growing segment of families is asking about when they sit down with you.
The clearest takeaway from this whole week is one you can act on immediately. Corporate volume is soft. Corporate preneed is growing. The operators who built the infrastructure to find, educate, and follow up with families are capturing that growth. The operators waiting for at-need calls to carry the business are feeling the mortality softness directly with nothing to offset it.
Pull the last four quarters of your own preneed production. Look at the trend. If it is flat while SCI is posting 6 percent growth, that gap is not closing on its own.
-John