Was Restaurant Brands New Zealand Limited's (NZE:RBD) Earnings Growth Better Than The Industry's?

Measuring Restaurant Brands New Zealand Limited's (NZSE:RBD) 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 RBD's recent performance announced on 11 September 2017 and compare these figures to its historical trend and industry movements. View our latest analysis for Restaurant Brands New Zealand

Were RBD's earnings stronger than its past performances and the industry?

I like to use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend allows me to examine different stocks in a uniform manner using the most relevant data points. For Restaurant Brands New Zealand, its latest earnings (trailing twelve month) is NZ$31.53M, which compared to last year’s figure, has moved up by 30.49%. Given that these values may be fairly short-term, I have estimated an annualized five-year figure for Restaurant Brands New Zealand's earnings, which stands at NZ$21.82M This means generally, Restaurant Brands New Zealand has been able to increasingly improve its profits over the past few years as well.

How has it been able to do this? Let's see whether it is merely because of industry tailwinds, or if Restaurant Brands New Zealand has experienced some company-specific growth. The rise in earnings seems to be supported by a solid top-line increase outpacing its growth rate of costs. Though this has caused a margin contraction, it has made Restaurant Brands New Zealand more profitable. Inspecting growth from a sector-level, the NZ hospitality industry has been growing, albeit, at a unexciting single-digit rate of 6.60% in the prior year, . This is a turnaround from a volatile drop of -5.62% in the past few years. This shows that, in the recent industry expansion, Restaurant Brands New Zealand is capable of leveraging this to its advantage.

What does this mean?

Though Restaurant Brands New Zealand's past data is helpful, it is only one aspect of my investment thesis. While Restaurant Brands New Zealand has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. You should continue to research Restaurant Brands New Zealand to get a more holistic view of the stock by looking at:

• 1. Future Outlook: What are well-informed industry analysts predicting for RBD’s future growth? Take a look at our free research report of analyst consensus for RBD’s outlook.
• 2. Financial Health: Is RBD’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 11 September 2017. 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.