The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Winmark beat expectations on revenue and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue improved significantly and GAAP earnings per share expanded significantly.
Gross margin dropped, operating margin improved, and net margin increased.
Winmark notched revenue of $13.2 million. The one analyst polled by S&P Capital IQ hoped for revenue of $11.5 million on the same basis. GAAP reported sales were 26% higher than the prior-year quarter's $10.5 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $0.84. The one earnings estimate compiled by S&P Capital IQ averaged $0.60 per share on the same basis. GAAP EPS of $0.80 for Q4 were 36% higher than the prior-year quarter's $0.59 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 89.6%, 450 basis points worse than the prior-year quarter. Operating margin was 52.2%, 130 basis points better than the prior-year quarter. Net margin was 31.6%, 180 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $12.3 million. On the bottom line, the average EPS estimate is $0.56.
Next year's average estimate for revenue is $50.3 million. The average EPS estimate is $2.53.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 29 members out of 43 rating the stock outperform, and 14 members rating it underperform. Among 16 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), nine give Winmark a green thumbs-up, and seven give it a red thumbs-down.
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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.