The 10-second takeaway
For the quarter ended Dec. 31 (Q4), AFC Enterprises met expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue improved, and GAAP earnings per share increased significantly.
Gross margins increased, operating margins dropped, and net margins improved.
AFC Enterprises tallied revenue of $36.3 million. The one analyst polled by S&P Capital IQ expected sales of $36.5 million on the same basis. GAAP reported sales were 6.1% higher than the prior-year quarter's $34.2 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 $0.24. The three earnings estimates compiled by S&P Capital IQ anticipated $0.24 per share on the same basis. GAAP EPS of $0.23 for Q4 were 28% higher than the prior-year quarter's $0.18 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 79.1%, 250 basis points better than the prior-year quarter. Operating margin was 23.1%, 120 basis points worse than the prior-year quarter. Net margin was 15.7%, 280 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $49.2 million. On the bottom line, the average EPS estimate is $0.31.
Next year's average estimate for revenue is $167.1 million. The average EPS estimate is $1.14.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 53 members rating the stock outperform and 14 members rating it underperform. Among 21 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 19 give AFC Enterprises 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 AFC Enterprises is buy, with an average price target of $19.33.
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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.