The 10-second takeaway
For the quarter ended Feb. 25 (Q3), Resources Connection met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded and GAAP earnings per share expanded significantly.
Margins improved across the board.
Resources Connection chalked up revenue of $143.3 million. The eight analysts polled by S&P Capital IQ hoped for a top line of $143.3 million on the same basis. GAAP reported sales were 4.1% higher than the prior-year quarter's $137.6 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 $0.10. The nine earnings estimates compiled by S&P Capital IQ predicted $0.08 per share. GAAP EPS of $0.10 for Q3 were 400% higher than the prior-year quarter's $0.02 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 37.4%, 40 basis points better than the prior-year quarter. Operating margin was 5.8%, 390 basis points better than the prior-year quarter. Net margin was 3.0%, 250 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $149.0 million. On the bottom line, the average EPS estimate is $0.14.
Next year's average estimate for revenue is $579.1 million. The average EPS estimate is $0.42.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 159 members out of 176 rating the stock outperform, and 17 members rating it underperform. Among 64 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 60 give Resources Connection a green thumbs-up, and four give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Resources Connection is outperform, with an average price target of $13.22.
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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.