Interline Brands Meets on the Top Line, Misses Where It Counts

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Interline Brands (NYS: IBI) reported earnings on May 8. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 30 (Q1), Interline Brands met expectations on revenue and missed estimates on earnings per share.

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


Gross margin shrank, operating margin shrank, and net margin expanded.

Revenue details
Interline Brands chalked up revenue of $313.6 million. The four analysts polled by S&P Capital IQ expected net sales of $312.5 million on the same basis. GAAP reported sales were 5.4% higher than the prior-year quarter's $297.4 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 $0.23. The four earnings estimates compiled by S&P Capital IQ forecast $0.25 per share. GAAP EPS of $0.23 for Q1 were 15% higher than the prior-year quarter's $0.20 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 36.9%, 40 basis points worse than the prior-year quarter. Operating margin was 5.7%, 10 basis points worse than the prior-year quarter. Net margin was 2.4%, 10 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $331.1 million. On the bottom line, the average EPS estimate is $0.35.

Next year's average estimate for revenue is $1.30 billion. The average EPS estimate is $1.30.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS. Among 17 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 13 give Interline Brands a green thumbs-up, and four give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Interline Brands is outperform, with an average price target of $25.00.

Over the decades, small-cap stocks like Interline Brands have provided market-beating returns, provided they're value-priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: Two Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.

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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