The 10-second takeaway
For the quarter ended June 30 (Q2), Skullcandy beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly and GAAP earnings per share expanded.
Gross margins contracted, operating margins contracted, net margins improved.
Skullcandy reported revenue of $72.4 million. The 10 analysts polled by S&P Capital IQ anticipated revenue of $65.6 million on the same basis. GAAP reported sales were 38% higher than the prior-year quarter's $52.4 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 $0.24. The 11 earnings estimates compiled by S&P Capital IQ anticipated $0.22 per share. GAAP EPS of $0.24 for Q2 were 9.1% higher than the prior-year quarter's $0.22 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 49.2%, 190 basis points worse than the prior-year quarter. Operating margin was 16.2%, 210 basis points worse than the prior-year quarter. Net margin was 9.4%, 130 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $72.7 million. On the bottom line, the average EPS estimate is $0.22.
Next year's average estimate for revenue is $296.8 million. The average EPS estimate is $1.16.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 118 members out of 143 rating the stock outperform, and 25 members rating it underperform. Among 32 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 19 give Skullcandy a green thumbs-up, and 13 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Skullcandy is buy, with an average price target of $22.10.
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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. The Motley Fool owns shares of SKULLCANDY INC. 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.