The 10-second takeaway
For the quarter ended June 28 (Q2), Graco beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded. Non-GAAP earnings per share grew significantly. GAAP earnings per share increased significantly.
Margins expanded across the board.
Graco logged revenue of $286.0 million. The eight analysts polled by S&P Capital IQ hoped for revenue of $282.3 million on the same basis. GAAP reported sales were 6.7% higher than the prior-year quarter's $268.2 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 $0.93. The eight earnings estimates compiled by S&P Capital IQ predicted $0.85 per share. Non-GAAP EPS of $0.93 for Q2 were 66% higher than the prior-year quarter's $0.56 per share. GAAP EPS of $0.92 for Q2 were 64% higher than the prior-year quarter's $0.56 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 55.5%, 90 basis points better than the prior-year quarter. Operating margin was 26.3%, 410 basis points better than the prior-year quarter. Net margin was 20.2%, 740 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $273.7 million. On the bottom line, the average EPS estimate is $0.78.
Next year's average estimate for revenue is $1.09 billion. The average EPS estimate is $3.20.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Graco is outperform, with an average price target of $62.00.
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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.