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Should You Be Concerned With Flanigan's Enterprises, Inc.'s (NYSEMKT:BDL) -5.0% Earnings Drop?

Simply Wall St

Today I will examine Flanigan's Enterprises, Inc.'s (NYSEMKT:BDL) latest earnings update (29 June 2019) and compare these figures against its performance over the past couple of years, in addition to how the rest of BDL's industry performed. As a long-term investor, I find it useful to analyze the company's trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time.

See our latest analysis for Flanigan's Enterprises

Despite a decline, did BDL underperform the long-term trend and the industry?

BDL's trailing twelve-month earnings (from 29 June 2019) of US$3.3m has declined by -5.0% 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 3.9%, indicating the rate at which BDL is growing has slowed down. What could be happening here? Well, let’s take a look at what’s going on with margins and whether the entire industry is feeling the heat.

AMEX:BDL Income Statement, August 19th 2019

In terms of returns from investment, Flanigan's Enterprises has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. Furthermore, its return on assets (ROA) of 5.9% is below the US Hospitality industry of 5.9%, indicating Flanigan's Enterprises's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Flanigan's Enterprises’s debt level, has declined over the past 3 years from 16% to 11%.

What does this mean?

Flanigan's Enterprises's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors impacting its business. You should continue to research Flanigan's Enterprises to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for BDL’s future growth? Take a look at our free research report of analyst consensus for BDL’s outlook.
  2. Financial Health: Are BDL’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.
  3. 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 29 June 2019. This may not be consistent with full year annual report figures.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.