Does Christian Dior SE's (EPA:CDI) 37.66% Earnings Growth Make It An Outperformer?

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 Christian Dior SE's (ENXTPA:CDI) 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. See our latest analysis for Christian Dior

How Well Did CDI Perform?

I prefer to use data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This method allows me to examine different stocks in a uniform manner using the most relevant data points. For Christian Dior, its latest trailing-twelve-month earnings is €2.12B, which, relative to the previous year's figure, has climbed up by 37.66%. Since these figures may be relatively short-term thinking, I have determined an annualized five-year value for CDI's earnings, which stands at €1.67B This means on average, Christian Dior has been able to gradually improve its earnings over the last few years as well.

How has it been able to do this? Let's take a look at whether it is only a result of industry tailwinds, or if Christian Dior has seen some company-specific growth. The hike in earnings seems to be bolstered by a substantial top-line increase outstripping its growth rate of expenses. Though this has led to a margin contraction, it has made Christian Dior more profitable. Looking at growth from a sector-level, the FR luxury industry has been growing its average earnings by double-digit 28.97% in the previous twelve months, and a less exciting 8.30% over the past five. This shows that whatever uplift the industry is gaining from, Christian Dior is capable of amplifying this to its advantage.

What does this mean?

While past data is useful, it 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? You should continue to research Christian Dior to get a better picture of the stock by looking at:

• 1. Future Outlook: What are well-informed industry analysts predicting for CDI’s future growth? Take a look at our free research report of analyst consensus for CDI’s outlook.
• 2. Financial Health: Is CDI’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 31 December 2016. This may not be consistent with full year annual report figures.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.