Kid Brands Earnings Preview

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Kid Brands (NYS: KID) will try to beat its earnings estimates for the fourth consecutive quarter. The company will unveil its latest earnings Wednesday. Through its subsidiaries, Kid Brands is a designer, importer, marketer, and distributor of infant and juvenile products in a number of complementary categories.

What analysts say:

What our community says:
CAPS All-Stars are solidly backing the stock with 84.6% assigning it an "outperform" rating. The majority of the Fools are in agreement with the All-Stars as 69.2% give it an "outperform" rating. Fools are keen on Kid Brands, though the message boards have been quiet lately with only 22 posts in the past 30 days. Kid Brands' bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
A year-over-year revenue decrease last quarter snaps a streak of three consecutive quarters of revenue increases. The company's gross margin shrank by 3.2 percentage points in the last quarter. Revenue fell 2.7% while cost of sales rose 1.8% to $43.6 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q1

Q4

Q3

Q2

Gross Margin

27.2%

21.6%

29.0%

30.5%

Operating Margin

1.5%

1.2%

9.7%

11.6%

Net Margin

(0.4%)

30.3%

5.6%

6.6%

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At the time this article was published

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