The 10-second takeaway
For the quarter ended Nov. 23 (Q3), American Greetings missed estimates on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue grew and GAAP earnings per share contracted to a loss.
Gross margins expanded, operating margins dropped, net margins contracted.
American Greetings reported revenue of $506.8 million. The one analyst polled by S&P Capital IQ hoped for sales of $533.0 million on the same basis. GAAP reported sales were 9.3% higher than the prior-year quarter's $463.6 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 $0.26. The two earnings estimates compiled by S&P Capital IQ anticipated $0.55 per share. GAAP EPS were -$0.03 for Q3 against $0.50 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 51.8%, 150 basis points better than the prior-year quarter. Operating margin was 0.1%, 710 basis points worse than the prior-year quarter. Net margin was -0.2%, 460 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $537.0 million. On the bottom line, the average EPS estimate is $0.81.
Next year's average estimate for revenue is $1.83 billion. The average EPS estimate is $1.69.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 117 members out of 191 rating the stock outperform, and 74 members rating it underperform. Among 67 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 44 give American Greetings a green thumbs-up, and 23 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.