Matthews International Earnings Call: “Challenges, Challenges”

August 19, 2026/Finance/

On August 7, Matthews International, a leader in the Death Care supply and equipment business, held their quarterly earnings call to give their opinion of the company’s Fiscal 3rd Quarter 2026 results and answer questions from analysts who cover the company.

Funeral Director Daily receives a transcript of the entire conversation through our subscription with Seeking Alpha. You can access that transcript here (although you may be subject to a paywall). In this article we will highlight some of the discusion with, as has been our practice, no comment from Funeral Director Daily.

Seeking Alpha now also provides a summarization of the Earnings Call via an artificial intelligence system that they use. Funeral Director Daily will also provide some of that AI commentary at the end of our article.

One thing to remember with Matthews International is that they are a diversified company with only one leg of their business stool in what they term the “Memorialization Segment” of their business. Funeral Director Daily’s coverage of Matthews International will focus on that segment.

Exerpts from Matthews International CEO Joseph Bartolacci’s Opening Remarks in the company’s Fiscal 3rd Quarter 2026 Earnings Call:

“Before I begin, I want to acknowledge that this was a difficult quarter. I’m going to be direct with you about the choices that we made, what happened, what didn’t, and why we remain confident that we have taken action to prevent this from happening again. . . . . . .We knew these were risks to our guidance, and we appropriately cautioned for those risks. Unfortunately, we did not expect that all of those risks would go against us. . . . “

“Regarding our Memorialization business, we continue to experience headwinds in terms of lower volumes as a result of a record low death rate combined with significantly higher input costs which have escalated beyond our inflationary price increases. We have watched as copper prices have gone from $4.50 per pound to $6.60 per pound and continue to rise. Steel prices have risen 21% on a year-over-year basis, while fuel costs have outstripped our expectations that we had when we provided guidance last quarter. Although we have raised prices and intend to continue to do so in order to meet our rising costs, the speed and magnitude of cost increases have materially outpaced our price increases, particularly where we have fixed contracts which do not allow more frequent price adjustments. . . . “

“Casket volume is an at-need product that peaks alongside flu season in our second quarter and steps down in the third. Bronze and granite memorial products work on a lag, particularly in the Northeast where installations wait for ground to thaw, which is why our third and fourth quarters are typically the strongest for our memorial products and our first quarter is seasonally weak across the industry. Layered on top of that, ordinary seasonal pattern this year, casket and cemetery memorial volumes continue to be a headwind due to lower estimated U.S. casketed deaths, a trend felt across the industry. . . . “

“To give you a sense of the industry backdrop, published U.S. mortality data show the overall death rate fell to its lowest recorded level last year, down approximately 4.6%, the largest annual decline on record as a share of the population. We build our forecast on the assumption that volume would improve in the second half, consistent with historical patterns. What we have seen instead is an unusual industry-wide further decline, reflecting a new historic low for death rates on a per capita basis. This is not a Matthews specific issue. July volume has been better, but we do not yet have visibility into August and September . . . .”

“The Dodge acquisition continues to contribute meaningfully. This acquisition continues to be nicely accretive to earnings as we leverage the benefits of our Memorialization commercial platform, and we have already realized the majority of its targeted cost synergies. We believe there are more M&A opportunities in the Memorialization space that look like Dodge, highly accretive, highly strategic, defensible market positions. Our relationships in this industry are deep and longstanding, and we are positioned to move when the time is right. . . “

CEO Joseph Bartolacci in response to a question about “Rising commodity and input costs versus price Increases”:

“. . .I mean, we just got whacked with a lot of things going the wrong way at that point in the business.

At the end of the day, let’s give you a perspective. So typically in the funeral home business, as you know, we are the followers, not the leaders in the industry. The leader is Batesville. They come out to market in September. We’ll see price increases going out in September. We’ll follow, I presume, or at least to adjust our prices for that. We are taking alternative action within our businesses to mitigate the impact of tariffs. But we’ll also find ways to cover those as well.

And when it comes to copper and other related products in our bronze business, we have raised prices. It just keeps continuing to go up faster than we can keep up. And, you know, there is a level that we do have — although we are the leader in the industry, we do have competition, and we do have to be sensitive to that. We also — What we don’t want to see, and this is what we’ve been sensitive to throughout that part of our business, is a mix shift where all we do is raise the price and ultimately, we see a mix shift down in product that ultimately doesn’t get us the benefit that we need.

We have lived through this before and we will live through this one as well. As commodities cycle, they come back to a normalized rate and — when we have the benefit from that as a tailwind at that point in time. So we are doing the best we can to prepare the business for the long term, not for an immediate reaction.”

Exerpts from CEO Joseph Bartolacci in response to a question about “elasticity risk and worries about price points.”

“. . . We saw a migration shift down, and we obviously did not lose share. We did not shift from one product to another. They shifted within the product mixes. For example, a more expensive casket to a lower-priced casket just because of pricing. So that is something we are sensitive to. We saw — it was not a significant item, but it was enough to kind of cause us to sit back and watch.”

Here is the analysis from Seeking Alpha’s AI generated “Earnings Call Insights” which you may be able to access here (possibly subject to a paywall):

“Management characterized Q3 as a “difficult quarter” driven by weaker-than-expected engineering order timing, Memorialization volume softness tied to unusually low death rates, input-cost inflation that outpaced pricing. . . “

“Memorialization margin compression and tariffs; CEO Bartolacci: “It’s all of the above,” citing low death rates, tariffs mitigation, and that copper “keeps continuing to go up faster than we can keep up,” while watching for mix shift.”

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