Their first quarter of their fiscal year wasn't as bad as I thought it'd be but it wasn't amazing either considering retail is still suffering hard from COVID-19 and less spending due to issues with the recession we're in. But they reported $0.83 diluted EPS. The year ago period was $0.07 EPS. Except:
-They got a $92M benefit from the CARES Act and they utilized a net operating loss (NOL) carryback claim.
-SGA costs dropped massively. Which is good and as a long term shareholder something I want to see continue happening. SGA is bloated and I want to see it drop more in the future.
-Interest expense rose 57%, drawing down on debt due to COVID and to have liquidity for the various expenses that COVID created. Understandable.
-Operating earnings per share (277.9M diluted shares outstanding) was $0.72. But reported EPS was $0.84. How? Because of the tax benefit and one time help from the CARES Act.
-Pre-tax income was $185.4M You can do this by taking net income and adding income tax expense to it. Take $185.4M and subtract $92M from it. Why? Because that CARES Act benefit is one time. It's not what the company earned through its operations. So you get $93.4M. Divide that by the 277.9M shares outstanding and you get $0.33 EPS.
-And you can make it harder for the company also. If taxed at the corporate rate of 21%, then EPS is lower. Take 21% from $93.4M and you get $19,614,000. So $73,786,000 was their net income if you use the current corporate tax rate. Now EPS is $0.26. Not $0.83. $0.83 was triple what they made with one time items being taken out.
Submitted October 30, 2020 at 05:34PM by howtoreadspaghetti https://ift.tt/3ed33R6
