Winmark Crushes Estimates

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Winmark (NAS: WINA) reported earnings on Feb. 29. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Winmark beat expectations on revenue and crushed expectations on earnings per share.

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

Gross margin dropped, operating margin improved, and net margin increased.

Revenue details
Winmark notched revenue of $13.2 million. The one analyst polled by S&P Capital IQ hoped for revenue of $11.5 million on the same basis. GAAP reported sales were 26% higher than the prior-year quarter's $10.5 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
Non-GAAP EPS came in at $0.84. The one earnings estimate compiled by S&P Capital IQ averaged $0.60 per share on the same basis. GAAP EPS of $0.80 for Q4 were 36% higher than the prior-year quarter's $0.59 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 89.6%, 450 basis points worse than the prior-year quarter. Operating margin was 52.2%, 130 basis points better than the prior-year quarter. Net margin was 31.6%, 180 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $12.3 million. On the bottom line, the average EPS estimate is $0.56.

Next year's average estimate for revenue is $50.3 million. The average EPS estimate is $2.53.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 29 members out of 43 rating the stock outperform, and 14 members rating it underperform. Among 16 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), nine give Winmark a green thumbs-up, and seven give it a red thumbs-down.

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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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