The 10-second takeaway
For the quarter ended Dec. 30 (Q4), AFC Enterprises beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly. Non-GAAP earnings per share grew significantly. GAAP earnings per share increased significantly.
Gross margins dropped, operating margins grew, net margins grew.
AFC Enterprises notched revenue of $47.5 million. The three analysts polled by S&P Capital IQ hoped for sales of $44.4 million on the same basis. GAAP reported sales were 31% higher than the prior-year quarter's $36.3 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 $0.34. The three earnings estimates compiled by S&P Capital IQ forecast $0.33 per share. Non-GAAP EPS of $0.34 for Q4 were 42% higher than the prior-year quarter's $0.24 per share. GAAP EPS of $0.35 for Q4 were 52% higher than the prior-year quarter's $0.23 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 70.9%, 70 basis points worse than the prior-year quarter. Operating margin was 30.7%, 620 basis points better than the prior-year quarter. Net margin was 18.1%, 240 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $59.2 million. On the bottom line, the average EPS estimate is $0.42.
Next year's average estimate for revenue is $196.2 million. The average EPS estimate is $1.44.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 71 members out of 87 rating the stock outperform, and 16 members rating it underperform. Among 23 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 18 give AFC Enterprises a green thumbs-up, and five give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on AFC Enterprises is outperform, with an average price target of $29.30.
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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 has no position in any of the stocks mentioned. 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.