Did Hooker Furniture Corporation’s (NASDAQ:HOFT) Recent Earnings Growth Beat The Trend?

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Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess Hooker Furniture Corporation’s (NASDAQ:HOFT) 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.

View our latest analysis for Hooker Furniture

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

HOFT’s trailing twelve-month earnings (from 03 February 2019) of US$40m has jumped 40% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 29%, indicating the rate at which HOFT is growing has accelerated. What’s the driver of this growth? Let’s take a look at whether it is merely a result of an industry uplift, or if Hooker Furniture has experienced some company-specific growth.

NasdaqGS:HOFT Income Statement, June 10th 2019
NasdaqGS:HOFT Income Statement, June 10th 2019

In terms of returns from investment, Hooker Furniture has fallen short of achieving a 20% return on equity (ROE), recording 15% instead. However, its return on assets (ROA) of 11% exceeds the US Consumer Durables industry of 7.1%, indicating Hooker Furniture has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Hooker Furniture’s debt level, has increased over the past 3 years from 14% to 17%.

What does this mean?

Though Hooker Furniture’s past data is helpful, it is only one aspect of my investment thesis. While Hooker Furniture 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 Hooker Furniture to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for HOFT’s future growth? Take a look at our free research report of analyst consensus for HOFT’s outlook.
  2. Financial Health: Are HOFT’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 03 February 2019. This may not be consistent with full year annual report figures.

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.

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. Thank you for reading.