Isetan Mitsukoshi Holdings' (TSE:3099) Earnings Offer More Than Meets The Eye

Investors signalled that they were pleased with Isetan Mitsukoshi Holdings Ltd.'s (TSE:3099) most recent earnings report. According to our analysis of the report, the strong headline profit numbers are supported by strong earnings fundamentals.

Our free stock report includes 1 warning sign investors should be aware of before investing in Isetan Mitsukoshi Holdings. Read for free now.

How Do Unusual Items Influence Profit?

To properly understand Isetan Mitsukoshi Holdings' profit results, we need to consider the JP¥8.9b expense attributed to unusual items. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And that's hardly a surprise given these line items are considered unusual. Assuming those unusual expenses don't come up again, we'd therefore expect Isetan Mitsukoshi Holdings to produce a higher profit next year, all else being equal.

That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On Isetan Mitsukoshi Holdings' Profit Performance

Because unusual items detracted from Isetan Mitsukoshi Holdings' earnings over the last year, you could argue that we can expect an improved result in the current quarter. Because of this, we think Isetan Mitsukoshi Holdings' earnings potential is at least as good as it seems, and maybe even better! And on top of that, its earnings per share have grown at an extremely impressive rate over the last three years. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. While conducting our analysis, we found that Isetan Mitsukoshi Holdings has 1 warning sign and it would be unwise to ignore this.

This note has only looked at a single factor that sheds light on the nature of Isetan Mitsukoshi Holdings' profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership.

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This article by Simply Wall St 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. Simply Wall St has no position in any stocks mentioned.