Measuring Flowers Foods, Inc.’s (NYSE:FLO) track record of past performance is a valuable exercise for investors. It allows us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess FLO’s recent performance announced on 13 July 2019 and compare these figures to its historical trend and industry movements.
Were FLO’s earnings stronger than its past performances and the industry?
FLO’s trailing twelve-month earnings (from 13 July 2019) of US$179m has jumped 27% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -3.0%, indicating the rate at which FLO is growing has accelerated. What’s enabled this growth? Let’s see if it is solely due to an industry uplift, or if Flowers Foods has seen some company-specific growth.
In terms of returns from investment, Flowers Foods has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. Furthermore, its return on assets (ROA) of 5.9% is below the US Food industry of 6.0%, indicating Flowers Foods’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Flowers Foods’s debt level, has declined over the past 3 years from 13% to 10%.
What does this mean?
Flowers Foods’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Flowers Foods to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for FLO’s future growth? Take a look at our free research report of analyst consensus for FLO’s outlook.
- Financial Health: Are FLO’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 13 July 2019. This may not be consistent with full year annual report figures.
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