Why Franklin Covey Stock Plummeted Today
Key Points
Franklin Covey posted its quarterly results yesterday, and results were worse than expected.
The company also lowered its full-year performance outlookk.
Franklin Covey (NYSE: FC) stock got hit with a double-digit pullback in Thursday's trading. The company's share price closed out the day down 12.9%. The S&P 500 ended the day roughly flat, and the Nasdaq Composite ended the session down 0.8%.
After the market closed on July 1, Franklin Covey published results for the third quarter of its 2026 fiscal year -- which ended May 31. Sales and earnings for the period came in below Wall Street's forecasts, and the company's forward guidance also came in below expectations.
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Franklin Covey slips on softer-than-expected quarterly results
Franklin Covey posted earnings per share of $0.27 on sales of $67.8 million in the third quarter of its current fiscal year, coming in below the average analyst estimate's target for per-share earnings of $0.31 on revenue of roughly $68.3 million. Even though the company's revenue moved up roughly 1% year over year, earnings actually improved significantly over the loss of $0.11 per share posted in the prior-year quarter -- but performance still came in significantly below the market's expectations.
Forward guidance was also softer than expected
With its latest business update, Franklin Covey guided for sales to come in between $260 million and $267 million. Previously, the company had targeted sales between $265 million and $275 million. For comparison, the average analyst estimate had targeted revenue of roughly $267.76 million.
The company also issued a new target for non-GAAP (adjusted) earnings before interest, taxes, depreciation, and amortization (EBITDA) between $28 million and $31 million. The company had previously targeted adjusted EBITDA between $28 million and $33 million. With the company missing quarterly performance expectations and lowering its full-year guidance, it's not surprising that the stock sold off today.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Franklin Covey. The Motley Fool has a disclosure policy.