For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at Vince Holding Corp’s (NYSE:VNCE) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
Commentary On VNCE’s Past Performance
VNCE recently turned a profit of US$62.3m (most recent trailing twelve-months) compared to its average loss of -US$16.9m over the past five years.
Over the past couple of years, Vince Holding top-line expansion has overtaken earnings and the growth rate of expenses. Though this has caused a margin contraction, it has cushioned Vince Holding’s earnings contraction.
Viewing growth from a sector-level, the US luxury industry has been relatively flat in terms of earnings growth over the past couple of years. This growth is a median of profitable companies of 25 Luxury companies in US including Movado Group, Delta Apparel and Hanesbrands. This means that any recent headwind the industry is facing, it’s hitting Vince Holding harder than its peers.
In terms of returns from investment, Vince Holding has invested its equity funds well leading to a 89.8% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 30.1% exceeds the US Luxury industry of 7.1%, indicating Vince Holding has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Vince Holding’s debt level, has increased over the past 3 years from 19.2% to 36.8%.
What does this mean?
Vince Holding’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. You should continue to research Vince Holding to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for VNCE’s future growth? Take a look at our free research report of analyst consensus for VNCE’s outlook.
- Financial Health: Are VNCE’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 05 May 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 email@example.com.