The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Skullcandy beat expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly. Non-GAAP earnings per share stayed the same. GAAP earnings per share shrank.
Margins dropped across the board.
Skullcandy reported revenue of $101.0 million. The nine analysts polled by S&P Capital IQ predicted net sales of $98.6 million on the same basis. GAAP reported sales were 21% higher than the prior-year quarter's $83.4 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 $0.47. The 10 earnings estimates compiled by S&P Capital IQ anticipated $0.48 per share. Non-GAAP EPS of $0.47 were the same as the prior-year quarter. GAAP EPS of $0.41 for Q4 were 8.9% lower than the prior-year quarter's $0.45 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 44.7%, 560 basis points worse than the prior-year quarter. Operating margin was 17.5%, 980 basis points worse than the prior-year quarter. Net margin was 11.4%, 340 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $59.8 million. On the bottom line, the average EPS estimate is -$0.25.
Next year's average estimate for revenue is $333.7 million. The average EPS estimate is $0.40.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 191 members out of 219 rating the stock outperform, and 28 members rating it underperform. Among 67 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 58 give Skullcandy a green thumbs-up, and nine give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Skullcandy is outperform, with an average price target of $15.78.
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Seth Jayson owned shares of the following at the time of publication: Skullcandy. 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 SKULLCANDY INC. 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.