Earlier this week the largest funeral home and cemetery operator in North America, Service Corporation International (SCI), revealed their results for the 2nd Quarter of 2021. It was a much anticipated report as it would mark a comparison with the 2nd Quarter of 2020 when the Covid-19 pandemic was flourishing and funeral homes and cemeteries were operating in a much more difficult and different world.
As you might expect SCI’s “comparable funeral services performed” dropped 6.0% to 84,449 cases as compared to the Covid induced 2020 number of 89,675. Total company revenue for the quarter, however, increased to $987.5 million as compared to 2020 2Q revenue of $820.0 million — an increase of 20.4%. The company reported from the Funeral Segment that on a “Revenue per case” basis, that revenue works out to $5,354 per case as compared to 2020’s number which was at $4,733 per case. . . . an increase of over $600 on a per call basis.
Net income rose to $157.7 million in 2021 as compared to $105.5 million for the 2nd Quarter of 2020. In addition, Net Income for the first six months of 2021 has more than doubled its 2020 number from $187.4 million in 2020 to $386.6 million in 2021.
Here are a couple of other items that we noticed from the 2Q Report:
- Pre-Need contracts sold increased to over 58,000 for 2Q 2021 as compared to about 41,000 sold in 2Q 2020 — an increase of 30%
- Pre-Need contracts sold, when compared to a non-Covid year such as 2019, increased about 6%
- Average Revenue per Pre-Need contract sold for 2Q 2020 somewhat mirrored the at-need average as it increased to $6,019 as compared to 2020’s $5,423.
- Cremation percentage of comparable results showed that Q2 2021 had a cremation rate of 59.1% as compared to a Q2 2020 rate of 58.9%
Here also is a quote from the report on the increase in Preneed sales : “Comparable preneed funeral sales production increased $105.6 million, or 57.1%, in the second quarter of 2021 compared to 2020. We experienced a 61.9% increase at our core funeral locations and a 40.1% increase in preneed production through our non-funeral home channel. The increase in comparable preneed funeral sales production was aided by a significant growth in digital and direct mail leads, as well as the gradual return of local marketing events and in-person seminars.”
You can read the Service Corporation International 2nd Quarter 2021 Report here.
Funeral Director Daily take: I think that this is an important report in that it shows funeral home owners and managers all over the country who had reduced revenue per case due to Covid and social distancing issues in 2020, that we can, with the right approach get back to increasing revenue per case eventually. One thing we don’t know however, is if “delayed” memorial services from 2020 and held in 2021 contributes to this uptick as it would be revenue realized now, but be considered a case count from last year’s years disposition numbers. If that was the case, then these revenue per services numbers would be artificially inflated.
Checking back two years to Q2 2019 and comparing with Q2 2021 is also somewhat reassuring. Q2 2019 was prior Covid and SCI has been able to raise the revenue per case dollar amount to $5,354 in 2021 as compared to $5,150 in 2019. . . an increase of 4% per case. That shows, that while funeral home owners all over the hemisphere are fighting increased lower priced direct cremation services, proper management is still allowing for some per case revenue growth.
We do believe, however, that continued revenue per case growth, far into the future, will be difficult to achieve.
Disclaimer: The author of this article holds a stock position in Service Corporation International.
More news from the world of Death Care:
- Covid-19: Recent claims about cremations and vaccines fact-checked. BBC News (Great Britain)
- Village and town focus on future of Nelliston Cemetery. The Daily Gazette (NY)
Enter your e-mail below to join the 2,240 others who receive Funeral Director Daily articles daily: