The 10-second takeaway
For the quarter ended Feb. 28 (Q2), Sonic met expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted. Non-GAAP earnings per share expanded significantly. GAAP earnings per share grew significantly.
Margins increased across the board.
Sonic logged revenue of $111.1 million. The 14 analysts polled by S&P Capital IQ anticipated a top line of $112.7 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.
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 $0.05. The 16 earnings estimates compiled by S&P Capital IQ predicted $0.05 per share. Non-GAAP EPS of $0.05 for Q2 were 67% higher than the prior-year quarter's $0.03 per share. GAAP EPS of $0.06 for Q2 were 100% higher than the prior-year quarter's $0.03 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 50.5%, 40 basis points better than the prior-year quarter. Operating margin was 10.8%, 150 basis points better than the prior-year quarter. Net margin was 3.2%, 170 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $150.6 million. On the bottom line, the average EPS estimate is $0.27.
Next year's average estimate for revenue is $540.6 million. The average EPS estimate is $0.70.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 366 members out of 421 rating the stock outperform, and 55 members rating it underperform. Among 123 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 107 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 hold, with an average price target of $11.52.
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