For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine Tapestry, Inc.’s (NYSE:TPR) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers.
Did TPR beat its long-term earnings growth trend and its industry?
TPR’s trailing twelve-month earnings (from 29 September 2018) of US$538m has jumped 18% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -17%, indicating the rate at which TPR is growing has accelerated. How has it been able to do this? Let’s see if it is merely owing to industry tailwinds, or if Tapestry has seen some company-specific growth.
In terms of returns from investment, Tapestry has fallen short of achieving a 20% return on equity (ROE), recording 16% instead. However, its return on assets (ROA) of 9.0% exceeds the US Luxury industry of 6.9%, indicating Tapestry has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Tapestry’s debt level, has increased over the past 3 years from 15% to 16%.
What does this mean?
Tapestry’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Recent positive growth doesn’t necessarily mean it’s onwards and upwards for the company. I suggest you continue to research Tapestry to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for TPR’s future growth? Take a look at our free research report of analyst consensus for TPR’s outlook.
- Financial Health: Are TPR’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 29 September 2018. 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 firstname.lastname@example.org.