The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Nutrisystem beat expectations on revenues and missed expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped significantly, and GAAP earnings per share contracted to a loss.
Margins dropped across the board.
Nutrisystem chalked up revenue of $66.9 million. The four analysts polled by S&P Capital IQ anticipated a top line of $64.4 million on the same basis. GAAP reported sales were 24% lower than the prior-year quarter's $87.9 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at -$0.04. The five earnings estimates compiled by S&P Capital IQ predicted -$0.02 per share. GAAP EPS were -$0.04 for Q4 against $0.26 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 46.6%, 990 basis points worse than the prior-year quarter. Operating margin was -3.6%, 1,660 basis points worse than the prior-year quarter. Net margin was -1.7%, 980 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $134.2 million. On the bottom line, the average EPS estimate is -$0.10.
Next year's average estimate for revenue is $414 million. The average EPS estimate is $0.49.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 822 members rating the stock outperform, and 94 members rating it underperform. Among 210 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 191 give Nutrisystem a green thumbs-up, and 19 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Nutrisystem is outperform, with an average price target of $16.25.
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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