How Has Bijou Brigitte modische Accessoires Aktiengesellschaft’s (FRA:BIJ) Earnings Fared Against The Long Term Trend
Assessing Bijou Brigitte modische Accessoires Aktiengesellschaft’s (FRA:BIJ) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess BIJ’s latest performance announced on 31 December 2017 and evaluate these figures to its historical trend and industry movements.
View our latest analysis for Bijou Brigitte modische Accessoires
Did BIJ perform worse than its track record and industry?
BIJ’s trailing twelve-month earnings (from 31 December 2017) of €21.7m has declined by -9.8% compared to the previous year. Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of -14.1%, indicating the rate at which BIJ is growing has slowed down. Why could this be happening? Well, let’s look at what’s occurring with margins and if the whole industry is feeling the heat.
Although revenue growth over the last few years, has been negative, earnings growth has been falling by even more, meaning Bijou Brigitte modische Accessoires has been increasing its expenses. This harms margins and earnings, and is not a sustainable practice. Eyeballing growth from a sector-level, the DE luxury industry has been growing, albeit, at a unexciting single-digit rate of 5.7% in the past twelve months, and a flatter 1.7% over the past five. This growth is a median of profitable companies of 25 Luxury companies in DE including Hanesbrands, Lakeland Industries and Ahlers. This suggests that any uplift the industry is deriving benefit from, Bijou Brigitte modische Accessoires has not been able to gain as much as its industry peers.
In terms of returns from investment, Bijou Brigitte modische Accessoires has fallen short of achieving a 20% return on equity (ROE), recording 9.0% instead. However, its return on assets (ROA) of 7.8% exceeds the DE Luxury industry of 6.5%, indicating Bijou Brigitte modische Accessoires has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Bijou Brigitte modische Accessoires’s debt level, has declined over the past 3 years from 17.8% to 14.2%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Typically companies that experience a prolonged period of diminishing earnings are going through some sort of reinvestment phase with the aim of keeping up with the latest industry disruption and growth. You should continue to research Bijou Brigitte modische Accessoires to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for BIJ’s future growth? Take a look at our free research report of analyst consensus for BIJ’s outlook.
Financial Health: Are BIJ’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2017. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
