KinderCare Updates 2026 Outlook After Enrollment Miss

The Tip Desk · November 13, 2026 · 3 min read

The early-childhood operator booked an $85.0 million net loss, or $0.71 a share, and now sees full-year revenue of about $2.64 billion to $2.66 billion.

KinderCare Learning Companies (KLC), a provider of early childhood and school-age education, reported a $75.5 million loss from operations for the third quarter ended October 3, 2026, versus income of $26.3 million a year earlier.

The swing was driven by an $83.4 million increase in impairment losses, primarily due to a further deterioration in market capitalization from a continued stock-price decline that triggered goodwill impairment, more centers closed and centers with lower operational performance resulting in higher impairment of long-lived assets, and indefinite-lived intangible asset impairment related to certain legacy trade names and trademarks. Goodwill impairment in the quarter was $71.4 million; indefinite-lived intangible impairment of $3.7 million fully wrote off certain legacy trade names and trademarks. The company also closed 20 early childhood education centers during the quarter as part of an ongoing center optimization initiative.

Total revenue fell 1.7% to $665.3 million from $676.8 million a year earlier, a larger year-over-year decline than the 0.4% drop to $697.5 million in the second quarter. Early childhood education center revenue declined 3.1%, or $19.6 million, as enrollment fell 5.9%, only partially offset by a 2.8% tuition-rate increase. The prior quarter’s center decline was 1.5% on 4.0% lower enrollment and a 2.6% rate increase. Operating fewer centers under the optimization initiative reduced enrollment by about 190 basis points versus the year-ago quarter.

Chairman and Chief Executive Officer Tom Wyatt said third-quarter enrollment at KinderCare Learning Centers fell short of expectations and that since the end of back-to-school, new enrollments have outpaced the same period last year, although overall enrollment remains below last year’s levels.

Before- and after-school sites, the Champions brand, posted the offsetting lift. That revenue rose 16.4%, or $8.2 million, primarily due to increased enrollment and opening new sites, after a 13.4% increase in the second quarter.

Cost of services rose $8.1 million, primarily due to higher rent, insurance, janitorial, utilities and food costs, combined with an increase in marketing spend, partially offset by lower personnel costs from reduced labor hours as a result of lower enrollment. Selling, general and administrative expenses remained relatively consistent, as reduced long-term compensation expenses were offset by higher severance from organizational changes and higher closed-center costs.

Net loss was $85.0 million, or $0.71 a share, compared with net income of $4.6 million, or $0.04 a share, a year earlier. Adjusted EBITDA fell 35.9%, or $23.9 million, to $42.5 million. Adjusted net loss was $3.0 million, or $0.03 a share.

As of October 3, 2026, the company operated 1,556 early childhood education centers and 1,208 before- and after-school sites. Cash and cash equivalents were $143.4 million, with $187.7 million of available borrowing capacity under the revolving credit facility after $74.8 million of outstanding letters of credit. During the nine months ended October 3, 2026, operating activities provided $109.8 million of cash and net investments totaled $91.3 million, primarily from purchases of property and equipment.

Based on current trends, the company is updating its full-year 2026 ranges. Revenue is now expected to be approximately $2.64 billion to $2.66 billion, adjusted EBITDA approximately $190 million to $195 million, and adjusted net income approximately $0.02 to $0.04 a share.

Wyatt said Champions’ strong results, progress at Crème and opportunities in KinderCare for Employers give the company a foundation to build on heading into 2027.