Resources Connection (NASDAQ:RGP) Posts Earnings Results, Beats Estimates By $0.01 EPS

Key Points

• Resources Connection beat earnings expectations by $0.01 per share, reporting -$0.07 EPS versus the -$0.08 consensus, while revenue came in at $106.11 million, slightly below estimates.
• Management said fourth-quarter results were broadly in line with guidance and highlighted that the business is entering fiscal 2027 with a more stable market backdrop, despite revenue falling 18.3% year over year on a constant-currency basis.
• The company ended the quarter with $82.4 million in cash and no debt, and customer sentiment remained strong, with 95% of customers saying they expect to maintain or increase engagement.

Resources Connection (NASDAQ:RGP - Get Free Report) released its quarterly earnings results on Wednesday. The company reported ($0.07) EPS for the quarter, topping the consensus estimate of ($0.08) by $0.01, FiscalAI reports. The company had revenue of $106.11 million during the quarter, compared to analyst estimates of $106.76 million. Resources Connection had a negative return on equity of 0.55% and a negative net margin of 20.16%.

Here are the key takeaways from Resources Connection's conference call:

• RGP said fourth-quarter results were broadly in line with its outlook, with revenue, run-rate SG&A and gross margin all within or better than guidance. Management also said the business is entering fiscal 2027 with a more stable market backdrop.
• Fourth-quarter revenue fell to $106.1 million, down 18.3% year over year on a same-day constant-currency basis, with weakness concentrated in Europe. Consulting and On-Demand Talent both declined, while Outsourced Services held up better.
• Customer feedback was encouraging: RGP’s survey found a strong Net Promoter Score, and 95% of customers said they intend to maintain or increase their engagement. Management said clients cited trusted partnership, speed, flexibility, and quality of people as key reasons to choose RGP.
• The company is continuing to invest behind four priorities: refocusing On-Demand Talent, scaling Consulting, expanding AI capabilities, and simplifying the cost structure. Management said the planned fiscal 2027 investments are largely complete and should begin to pay off later in the year.
• RGP ended the quarter with $82.4 million in cash and no debt, and it replaced its prior credit facility with a more flexible revolving facility. Management also highlighted a balance-sheet-supported capital allocation strategy that includes dividends and opportunistic share repurchases.

Resources Connection Trading Down 1.1%

Shares of RGP traded down $0.05 during mid-day trading on Wednesday, hitting $4.61. The company's stock had a trading volume of 633,111 shares, compared to its average volume of 442,653. The firm has a market capitalization of $158.26 million, a price-to-earnings ratio of -1.56 and a beta of 0.55. Resources Connection has a 52-week low of $3.06 and a 52-week high of $5.95. The company's 50-day moving average is $4.46 and its 200-day moving average is $4.20.

Resources Connection Dividend Announcement

The firm also recently declared a quarterly dividend, which was paid on Friday, June 19th. Stockholders of record on Thursday, May 21st were issued a $0.07 dividend. The ex-dividend date was Thursday, May 21st. This represents a $0.28 annualized dividend and a dividend yield of 6.1%. Resources Connection's payout ratio is currently -9.46%.

Hedge Funds Weigh In On Resources Connection

A number of large investors have recently added to or reduced their stakes in the company. Mackenzie Financial Corp lifted its holdings in shares of Resources Connection by 20.6% during the 3rd quarter. Mackenzie Financial Corp now owns 21,134 shares of the company's stock valued at $107,000 after purchasing an additional 3,607 shares during the last quarter. Schonfeld Strategic Advisors LLC purchased a new stake in shares of Resources Connection during the third quarter valued at $92,000. Sherbrooke Park Advisers LLC acquired a new position in shares of Resources Connection in the 3rd quarter valued at $87,000. Mercer Global Advisors Inc. ADV acquired a new stake in Resources Connection during the 3rd quarter worth about $85,000. Finally, Deutsche Bank AG purchased a new stake in Resources Connection during the 4th quarter valued at about $80,000. 93.23% of the stock is currently owned by institutional investors.

Wall Street Analyst Weigh In

RGP has been the topic of a number of recent analyst reports. Wall Street Zen raised shares of Resources Connection from a "sell" rating to a "hold" rating in a research report on Saturday, May 9th. Zacks Research upgraded Resources Connection from a "strong sell" rating to a "hold" rating in a research report on Tuesday, June 9th. Finally, Weiss Ratings upgraded Resources Connection from a "sell (e+)" rating to a "sell (d-)" rating in a report on Monday, June 15th. Two analysts have rated the stock with a Buy rating, one has given a Hold rating and one has given a Sell rating to the company's stock. According to MarketBeat.com, the stock has an average rating of "Hold" and a consensus target price of $7.00.

About Resources Connection

Resources Connection, Inc NASDAQ: RGP is a publicly traded professional services firm that specializes in providing independent consulting and project-based teams to help organizations manage critical business challenges. Operating under the RGP brand, the company connects highly skilled consultants with clients seeking support in areas such as finance and accounting, legal and risk management, supply chain optimization, technology implementation, and digital transformation.

RGP's consultants bring specific industry and functional expertise to engagements, working on a flexible basis that allows clients to scale resources up or down as needed.

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