Korn Ferry Rises on Strong Earnings and Search Division Growth
The consulting firm beat fiscal second-quarter estimates, fueled by double-digit revenue growth in its Executive Search and Professional Search segments.
Korn Ferry (NYSE: KFY) shares saw a lift in early trading after the global consulting firm posted fiscal second-quarter earnings that surpassed analyst expectations, driven by robust demand for its executive and professional search services.
The Los Angeles-based company reported an adjusted earnings per share of $1.33 for the quarter ending October 31, narrowly beating the consensus estimate of $1.31. Revenue came in stronger than anticipated at $729.8 million, a 7% year-over-year increase that comfortably exceeded the projected $706 million.
The positive results provide a key data point for the health of the high-end labor market, suggesting that corporations are continuing to invest in top-tier talent despite broader economic uncertainties. Korn Ferry's performance is often viewed as a bellwether for business confidence and corporate hiring trends at the executive level.
The engine of the company's growth was its core search business. The Executive Search division, which places C-suite and other senior leaders, saw fee revenue climb 10% compared to the same period last year. Even more impressive was the Professional Search & Interim segment, which grew a notable 17% year-over-year, indicating broad-based demand for skilled professionals and temporary management roles.
Following the announcement, Korn Ferry's stock, which closed the previous session at $64.97, saw an initial pre-market jump of approximately 1.7%. The company's shares have traded in a range between $58.45 and $77.97 over the past 52 weeks.
Looking ahead, Korn Ferry provided guidance for its fiscal third quarter that suggests a cautious but stable outlook. The company projects fee revenue to land between $680 million and $694 million, with adjusted diluted earnings per share forecast in a range of $1.19 to $1.25. This guidance will be closely watched by investors looking for signs of sustained momentum in the professional services sector.
Analysts have maintained a largely positive stance on Korn Ferry, with a consensus "Moderate Buy" rating. The average analyst price target sits near $81.00, suggesting potential upside from its current trading levels. The firm's ability to outperform in its key search segments, despite a complex macroeconomic backdrop, reinforces its strong market position.
The report from Korn Ferry could have positive implications for the wider consulting and human resources industry, indicating that demand for specialized talent and organizational advisory services remains a corporate priority heading into the new year.