Understanding how Helen of Troy Limited (NASDAQ:HELE) is performing as a company requires looking at more than just a years' earnings. Today I will run you through a basic sense check to gain perspective on how Helen of Troy is doing by comparing its latest earnings with its long-term trend as well as the performance of its consumer durables industry peers.
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Could HELE beat the long-term trend and outperform its industry?
HELE's trailing twelve-month earnings (from 28 February 2019) of US$174m has jumped 35% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 10%, indicating the rate at which HELE is growing has accelerated. What's the driver of this growth? Well, let’s take a look at whether it is merely attributable to industry tailwinds, or if Helen of Troy has seen some company-specific growth.
In terms of returns from investment, Helen of Troy has fallen short of achieving a 20% return on equity (ROE), recording 17% instead. However, its return on assets (ROA) of 11% exceeds the US Consumer Durables industry of 7.1%, indicating Helen of Troy has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Helen of Troy’s debt level, has increased over the past 3 years from 9.2% to 15%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While Helen of Troy has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. You should continue to research Helen of Troy to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for HELE’s future growth? Take a look at our free research report of analyst consensus for HELE’s outlook.
- Financial Health: Are HELE’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 28 February 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 email@example.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.