The 10-second takeaway
For the quarter ended April 27 (Q2), Valspar missed estimates on revenues and beat slightly on earnings per share.
Compared to the prior-year quarter, revenue increased and GAAP earnings per share grew significantly.
Margins increased across the board.
Valspar recorded revenue of $1.03 billion. The nine analysts polled by S&P Capital IQ predicted revenue of $1.07 billion on the same basis. GAAP reported sales were 4.0% higher than the prior-year quarter's $992.7 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 $0.84. The 13 earnings estimates compiled by S&P Capital IQ predicted $0.82 per share. GAAP EPS of $0.80 for Q2 were 38% higher than the prior-year quarter's $0.58 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 34.4%, 210 basis points better than the prior-year quarter. Operating margin was 12.7%, 200 basis points better than the prior-year quarter. Net margin was 7.4%, 170 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $1.14 billion. On the bottom line, the average EPS estimate is $0.95.
Next year's average estimate for revenue is $4.20 billion. The average EPS estimate is $3.21.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Valspar is outperform, with an average price target of $51.75.
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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.