User 183867

Hansen Narrowly Misses Estimates, But Earnings Are Far From Failure

I agree the company is undervalued and this quarter was fine, but disagree with your read on margins. Adjusting for some chunky corporate expenses in Q2 last year, operating expenses were up 22% on 15% revenue growth. With gross margin down, EBIT margin contracted by 200 bps, to a still quite-attractive 27.6%. What's most interesting is operating expenses per case, adjusting again for corporate items last year, were up 15%. Ex G&A, I would bet marketing was up even more per case. The company isn't making its numbers by stinting on marketing support and product innovation and they're not goosing volume by increasing trade promotion per case. That's the bullish takeaway here.