Want To Invest In Burberry Group plc (LON:BRBY)? Here’s How It Performed Lately
In this commentary, I will examine Burberry Group plc’s (LSE:BRBY) latest earnings update (30 September 2017) and compare these figures against its performance over the past couple of years, as well as how the rest of the luxury industry performed. As an investor, I find it beneficial to assess BRBY’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time. View our latest analysis for Burberry Group
How Did BRBY’s Recent Performance Stack Up Against Its Past?
I look at data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This technique allows me to examine various companies in a uniform manner using the latest information. For Burberry Group, its latest trailing-twelve-month earnings is UK£307.70M, which compared to the prior year’s figure, has risen by 17.44%. Since these values are fairly myopic, I have created an annualized five-year value for BRBY’s earnings, which stands at UK£284.75M This suggests that, on average, Burberry Group has been able to consistently grow its earnings over the last few years as well.
What’s the driver of this growth? Let’s take a look at if it is solely a result of industry tailwinds, or if Burberry Group has seen some company-specific growth. The ascend in earnings seems to be driven by a substantial top-line increase beating its growth rate of costs. Though this has caused a margin contraction, it has made Burberry Group more profitable. Eyeballing growth from a sector-level, the UK luxury industry has been growing its average earnings by double-digit 25.51% in the prior twelve months, and a flatter 0.85% over the previous five years. This means that whatever uplift the industry is profiting from, Burberry Group has not been able to reap as much as its average peer.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Burberry Group gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Burberry Group to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for BRBY’s future growth? Take a look at our free research report of analyst consensus for BRBY’s outlook.
2. Financial Health: Is BRBY’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 30 September 2017. This may not be consistent with full year annual report figures.
To help readers see pass 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.
