Graco Misses Q4 Earnings Estimates, Stock Dips
Graco (NYSE:GGG) underperformed analyst revenue expectations in Q4 2024, with sales declining 3.2% year-over-year to $548.7 million. Its non-GAAP earnings per share (EPS) of $0.64 fell short of consensus by 15.8%.
Q4 CY2024 Highlights:
* Revenue: $548.7 million (analyst consensus: $556.8 million)
* Adjusted EPS: $0.64 (analyst consensus: $0.76)
* Operating Margin: 23.7%, down from 30% in Q4 2023
"We continue to experience slower demand across many end markets," said Mark Sheahan, Graco's CEO.
Sales Growth:
Graco's sales growth rate of 5.1% over the past five years is below the sector benchmark. However, in the last two years, its revenue has remained flat, while peers have faced declines.
Operating Margin:
Graco has maintained strong operating margins at an average of 26.9% over the past five years, with a 3.2 percentage point increase during that period. In Q4, its margin declined by 6.3 percentage points to 23.7%.
Earnings Per Share:
Graco's EPS grew 7.9% per year over the past five years, outpacing its revenue growth rate. However, in Q4, EPS dropped to $0.64, missing expectations.
Analysts' Outlook:
Sell-side analysts anticipate revenue growth of 7.6% for Graco over the next 12 months, driven by new products and services. EPS is projected to increase 11.2%.
Key Takeaways:
* Graco's Q4 results fell short of estimates.
* The company attributed the underperformance to weaker demand.
* The stock declined 6.4% after the earnings announcement.
* Analysts remain optimistic about Graco's long-term prospects, with expectations of improved revenue and EPS growth.