The 10-second takeaway
For the quarter ended April 15 (Q1), AFC Enterprises beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded and GAAP earnings per share improved significantly.
Margins expanded across the board.
AFC Enterprises reported revenue of $52.8 million. The two analysts polled by S&P Capital IQ predicted net sales of $49.5 million on the same basis. GAAP reported sales were 13% higher than the prior-year quarter's $46.8 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 $0.35. The three earnings estimates compiled by S&P Capital IQ anticipated $0.31 per share. GAAP EPS of $0.34 for Q1 were 21% higher than the prior-year quarter's $0.28 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 69.7%, 180 basis points better than the prior-year quarter. Operating margin was 26.9%, 130 basis points better than the prior-year quarter. Net margin was 15.7%, 30 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $38.2 million. On the bottom line, the average EPS estimate is $0.26.
Next year's average estimate for revenue is $170.6 million. The average EPS estimate is $1.14.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 56 members out of 68 rating the stock outperform, and 12 members rating it underperform. Among 17 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 16 give AFC Enterprises a green thumbs-up, and one gives 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 $20.67.
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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.