Examining Floor & Decor Holdings, Inc.'s (NYSE:FND) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess FND's latest performance announced on 27 June 2019 and weigh these figures against its longer term trend and industry movements.
Was FND's recent earnings decline indicative of a tough track record?
FND's trailing twelve-month earnings (from 27 June 2019) of US$119m has declined by -17% 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 39%, indicating the rate at which FND is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s going on with margins and whether the whole industry is feeling the heat.
In terms of returns from investment, Floor & Decor Holdings has fallen short of achieving a 20% return on equity (ROE), recording 18% instead. However, its return on assets (ROA) of 6.4% exceeds the US Specialty Retail industry of 5.5%, indicating Floor & Decor Holdings has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Floor & Decor Holdings’s debt level, has declined over the past 3 years from 12% to 9.0%.
What does this mean?
Though Floor & Decor Holdings's past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have unpredictable earnings, can have many factors influencing its business. You should continue to research Floor & Decor Holdings to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for FND’s future growth? Take a look at our free research report of analyst consensus for FND’s outlook.
- Financial Health: Are FND’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 27 June 2019. This may not be consistent with full year annual report figures.
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