Paychex's stock falls after profit tops views but revenue comes up shy amid cost and labor challenges

Shares of Paychex Inc. (PAYX) shed 2% in premarket trading Thursday, after the human resources services company beat fiscal second-quarter profit expectations but came up a bit short on revenue, amid cost and labor market challenges. Net income for the quarter to Nov. 30 rose to $392.7 million, $1.08 a share, from $360.3 million, or 99 cents a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share of $1.08 topped the FactSet consensus of $1.07. Revenue grew 5.7% to $1.258 billion, below the FactSet consensus of $1.268 billion. "The macro-economic environment remains stable for small and mid-sized businesses, who continue to face challenges in both the cost of and access to growth capital; and finding quality talent in the current labor market," said Chief Executive John Gibson. For fiscal 2024, the company revised up its guidance range for adjusted EPS growth to 10% to 11% from 9% to 11%. The stock has tacked on 10.6% year to date through Wednesday, while the S&P 500 has rallied 22.4%.

-Tomi Kilgore

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12-21-23 0839ET

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