The 10-second takeaway
For the quarter ended Jan. 31 (Q3), H&R Block whiffed on revenues and missed expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped significantly. Non-GAAP loss per share expanded. GAAP loss per share grew.
Margins shrank across the board.
H&R Block chalked up revenue of $472.0 million. The three analysts polled by S&P Capital IQ expected a top line of $550.1 million on the same basis. GAAP reported sales were 30% lower than the prior-year quarter's $623.8 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 -$0.22. The five earnings estimates compiled by S&P Capital IQ predicted -$0.02 per share. Non-GAAP EPS were -$0.22 for Q3 compared to -$0.01 per share for the prior-year quarter. GAAP EPS were -$0.07 for Q3 against -$0.01 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 51.5%, 550 basis points worse than the prior-year quarter. Operating margin was -25.7%, much worse than the prior-year quarter. Net margin was -4.1%, 360 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $2.13 billion. On the bottom line, the average EPS estimate is $2.45.
Next year's average estimate for revenue is $2.96 billion. The average EPS estimate is $1.67.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 360 members out of 538 rating the stock outperform, and 178 members rating it underperform. Among 143 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 89 give H&R Block a green thumbs-up, and 54 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on H&R Block is outperform, with an average price target of $22.29.
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