The 10-second takeaway
For the quarter ended Nov. 26 (Q1), UniFirst beat expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue increased, and earnings per share grew.
Margins dropped across the board.
UniFirst reported revenue of $313 million. The seven analysts polled by S&P Capital IQ expected to see a top line of $296 million. Sales were 15% higher than the prior-year quarter's $273 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
EPS came in at $1.30. The seven earnings estimates compiled by S&P Capital IQ forecast $1.07 per share. GAAP EPS of $1.30 for Q1 were 8.3% higher than the prior-year quarter's $1.20 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 37.7%, 250 basis points worse than the prior-year quarter. Operating margin was 13.2%, 110 basis points worse than the prior-year quarter. Net margin was 8.2%, 50 basis points worse than the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods.
What does the future hold?
Next quarter's average estimate for revenue is $304 million. On the bottom line, the average EPS estimate is $0.89.
Next year's average estimate for revenue is $1.2 billion. The average EPS estimate is $4.05.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 74 members out of 83 rating the stock outperform, and nine members rating it underperform. Among 27 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 25 give UniFirst a green thumbs-up, and two give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on UniFirst is outperform, with an average price target of $62.67.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.