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Where Super Retail Group Limited (ASX:SUL) Stands In Terms Of Earnings Growth Against Its Industry

Simply Wall St

Examining Super Retail Group Limited's (ASX:SUL) past track record of performance is a useful exercise for investors. It allows us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess SUL's latest performance announced on 29 June 2019 and weight these figures against its longer term trend and industry movements.

See our latest analysis for Super Retail Group

Did SUL's recent earnings growth beat the long-term trend and the industry?

SUL's trailing twelve-month earnings (from 29 June 2019) of AU$139m has increased by 8.7% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 7.2%, indicating the rate at which SUL is growing has accelerated. What's the driver of this growth? Let's see whether it is solely due to industry tailwinds, or if Super Retail Group has seen some company-specific growth.

ASX:SUL Income Statement, August 15th 2019

In terms of returns from investment, Super Retail Group has fallen short of achieving a 20% return on equity (ROE), recording 17% instead. However, its return on assets (ROA) of 9.0% exceeds the AU Specialty Retail industry of 6.7%, indicating Super Retail Group has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Super Retail Group’s debt level, has increased over the past 3 years from 10% to 16%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 53% to 47% over the past 5 years.

What does this mean?

While past data is useful, it doesn’t tell the whole story. While Super Retail Group has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I suggest you continue to research Super Retail Group to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for SUL’s future growth? Take a look at our free research report of analyst consensus for SUL’s outlook.
  2. Financial Health: Are SUL’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 29 June 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 editorial-team@simplywallst.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.