The 10-second takeaway
For the quarter ended Nov. 30 (Q1), Sonic met expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped slightly and GAAP earnings per share increased significantly.
Margins increased across the board.
Sonic notched revenue of $126.0 million. The 14 analysts polled by S&P Capital IQ predicted revenue of $126.2 million on the same basis. GAAP reported sales were 1.8% lower than the prior-year quarter's $128.3 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 $0.11. The 16 earnings estimates compiled by S&P Capital IQ forecast $0.11 per share. GAAP EPS of $0.11 for Q1 were 22% higher than the prior-year quarter's $0.09 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 52.3%, 130 basis points better than the prior-year quarter. Operating margin was 13.7%, 60 basis points better than the prior-year quarter. Net margin was 4.9%, 60 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $113.1 million. On the bottom line, the average EPS estimate is $0.05.
Next year's average estimate for revenue is $543.8 million. The average EPS estimate is $0.69.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 370 members out of 419 rating the stock outperform, and 49 members rating it underperform. Among 120 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 104 give Sonic a green thumbs-up, and 16 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Sonic is outperform, with an average price target of $11.11.
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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. TMFDisclosureHere