Virco Manufacturing Corporation’s VIRC shares tumbled 2.6% during Monday’s trading hours after it reported an adjusted loss in the fourth quarter of fiscal 2024 (ended Jan. 31, 2025), with the net sales missing the Zacks Consensus Estimate. On a year-over-year basis, the top and the bottom lines declined.

The quarter’s performance was primarily hurt by the return of unfavorable weather conditions, resulting in lower volumes, and the ongoing uncertainties in the global trade market. Furthermore, the ongoing inflationary conditions added to the headwinds with the company’s cost and expense structure elevating during the quarter.

Nonetheless, Virco’s long-term strategy of investing in domestic manufacturing and services bodes well for its upcoming market prospects.

Delving Deeper Into Virco’s Q4 Numbers

The company reported an adjusted loss of 35 cents per share, which was broader than the Zacks Consensus Estimate of a loss of 15 cents by 133.3%. In the last reported quarter, it reported a loss of 14 cents per share. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)
 
Net sales of $28.5 million also missed the consensus mark of $43 million by 33.8% and declined 33.2% from the prior-year quarter’s level. The downtrend reflects the absence of an unusual counter-seasonal disaster recovery order that started to ship during last year’s winter season.

As of Jan. 31, 2024, Shipments plus Backlog (a non-GAAP metric that combines actual shipments with the unshipped backlog) inched down 0.6% year over year to $316.4 million.

VIRC’s Operating Highlights

The gross margin contracted significantly by 1,150 basis points (bps) to 26.2% compared with the year-ago value of 37.7%. The downturn was due to the adverse impact of lower revenues and increased costs and expenses.

Selling, general and administrative expenses – as a percentage of sales – expanded 1,050 bps to 54.7% from 44.2% reported a year ago. The increase was primarily attributable to the continuous work focused on the company’s PlanSCAPE full-service project management.

The company incurred a net loss of $5.7 million during the quarter, up from a net loss of $2.3 million incurred in the prior year’s quarter.

Virco’s Financials

At the fiscal 2024-end, Virco had cash of $26.9 million, significantly up from $5.3 million at the fiscal 2023-end. As of Oct. 30, 2024, long-term debt (less current portion) was $3.9 million, down from $4.1 million at fiscal 2023-end.

VIRC’s Zacks Rank & Key Picks

Virco currently carries a Zacks Rank #3 (Hold).

Here are some better-ranked stocks from the Consumer Discretionary sector.

Life Time Group Holdings, Inc. LTH presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The company has a trailing four-quarter earnings surprise of 21.6%, on average. The stock has gained 44.8% year to date. The consensus estimate for Life Time Group’s 2025 sales and earnings per share (EPS) implies growth of 12.9% and 37.9%, respectively, from the year-ago levels.

Adtalem Global Education Inc. ATGE currently sports a Zacks Rank of 1. The company has a trailing four-quarter earnings surprise of 21.6%, on average. The stock has trended up 17.2% year to date.

The Zacks Consensus Estimate for Adtalem’s fiscal 2025 sales and EPS indicates an increase of 10.1% and 23.8%, respectively, from the year-ago levels.

Laureate Education, Inc. LAUR currently sports a Zacks Rank of 1. The company has a trailing four-quarter negative earnings surprise of 97.2%, on average. The stock has inched up 6.7% year to date.

The Zacks Consensus Estimate for Laureate’s 2025 sales indicates a decline of 0.1% while the EPS reflects growth of 23%, from the year-ago levels.

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