Has Future Lifestyle Fashions Limited (NSE:FLFL) Improved Earnings Growth In Recent Times?

For investors with a long-term horizon, examining earnings trend over time and against industry peers is more insightful than looking at an earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Future Lifestyle Fashions Limited (NSEI:FLFL) useful as an attempt to give more color around how Future Lifestyle Fashions is currently performing.

Check out our latest analysis for Future Lifestyle Fashions

Could FLFL beat the long-term trend and outperform its industry?

FLFL's trailing twelve-month earnings (from 30 September 2019) of ₹1.6b has increased by 4.0% compared to the previous year.

However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 66%, indicating the rate at which FLFL is growing has slowed down. What could be happening here? Well, let's look at what's going on with margins and if the whole industry is facing the same headwind.

In terms of returns from investment, Future Lifestyle Fashions has fallen short of achieving a 20% return on equity (ROE), recording 8.7% instead. Furthermore, its return on assets (ROA) of 4.7% is below the IN Specialty Retail industry of 6.2%, indicating Future Lifestyle Fashions's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Future Lifestyle Fashions’s debt level, has increased over the past 3 years from 8.2% to 11%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 108% to 48% over the past 5 years.

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 Future Lifestyle Fashions to get a better picture of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for FLFL’s future growth? Take a look at our free research report of analyst consensus for FLFL’s outlook.
2. Financial Health: Are FLFL’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 2019. This may not be consistent with full year annual report figures.

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.

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. Thank you for reading.