The 10-second takeaway
For the quarter ended Aug. 24 (Q2), American Greetings missed estimates on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded and GAAP earnings per share shrank to a loss.
Margins dropped across the board.
American Greetings reported revenue of $393.8 million. The one analyst polled by S&P Capital IQ predicted a top line of $432.0 million on the same basis. GAAP reported sales were 6.8% higher than the prior-year quarter's $368.8 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 $0.25. The two earnings estimates compiled by S&P Capital IQ forecast $0.11 per share. GAAP EPS were -$0.13 for Q2 compared to $0.35 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 55.1%, 200 basis points worse than the prior-year quarter. Operating margin was 0.5%, 630 basis points worse than the prior-year quarter. Net margin was -1.1%, 500 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $533.0 million. On the bottom line, the average EPS estimate is $0.56.
Next year's average estimate for revenue is $1.90 billion. The average EPS estimate is $2.13.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 124 members out of 197 rating the stock outperform, and 73 members rating it underperform. Among 68 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 46 give American Greetings a green thumbs-up, and 22 give it a red thumbs-down.
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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 American Greetings. 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.