The 10-second takeaway
For the quarter ended Feb. 29 (Q2), Sonic missed slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue improved slightly and GAAP EPS contracted significantly.
Gross margin increased, operating margin expanded, and net margin dropped.
Sonic reported revenue of $115.1 million. The 14 analysts polled by S&P Capital IQ predicted revenue of $116.9 million on the same basis. GAAP reported sales were 1.4% higher than the prior-year quarter's $113.5 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 $0.03. The 17 earnings estimates compiled by S&P Capital IQ anticipated $0.02 per share. GAAP EPS of $0.03 for Q2 were 57% lower than the prior-year quarter's $0.07 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 50.1%, 40 basis points better than the prior-year quarter. Operating margin was 9.3%, 60 basis points better than the prior-year quarter. Net margin was 1.5%, 230 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $147.9 million. On the bottom line, the average EPS estimate is $0.20.
Next year's average estimate for revenue is $543.3 million. The average EPS estimate is $0.54.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 369 members rating the stock outperform and 49 members rating it underperform. Among 128 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 112 give Sonic a green thumbs-up, and 16 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Sonic is hold, with an average price target of $8.73.
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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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.