Spartan Stores Beats on EPS but GAAP Results Lag

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Spartan Stores (NAS: SPTN) reported earnings on Feb. 8. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q3), Spartan Stores met expectations on revenue and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue improved slightly and GAAP earnings per share shrank significantly.

Margins contracted across the board.

Revenue details
Spartan Stores recorded revenue of $797.2 million. The two analysts polled by S&P Capital IQ expected to see net sales of $807.2 million on the same basis. GAAP reported sales were 1.9% higher than the prior-year quarter's $782.3 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.22. The three earnings estimates compiled by S&P Capital IQ forecast $0.21 per share. GAAP EPS of $0.22 for Q3 were 31% lower than the prior-year quarter's $0.32 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 20.4%, 70 basis points worse than the prior-year quarter. Operating margin was 1.6%, 20 basis points worse than the prior-year quarter. Net margin was 0.6%, 30 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $638.5 million. On the bottom line, the average EPS estimate is $0.44.

Next year's average estimate for revenue is $2.67 billion. The average EPS estimate is $1.41.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 127 members out of 135 rating the stock outperform, and eight members rating it underperform. Among 42 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 40 give Spartan Stores a green thumbs-up, and two give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Spartan Stores is outperform, with an average price target of $20.00.

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At the time this article was published 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 ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. 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.

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