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Assessing La-Z-Boy Incorporated’s (NYSE:LZB) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess LZB’s recent performance announced on 27 October 2018 and evaluate these figures to its longer term trend and industry movements.
How Well Did LZB Perform?
LZB’s trailing twelve-month earnings (from 27 October 2018) of US$84m has declined by -1.3% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 7.7%, indicating the rate at which LZB is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s transpiring with margins and whether the whole industry is facing the same headwind.
In terms of returns from investment, La-Z-Boy has fallen short of achieving a 20% return on equity (ROE), recording 13% instead. However, its return on assets (ROA) of 7.9% exceeds the US Consumer Durables industry of 6.8%, indicating La-Z-Boy has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for La-Z-Boy’s debt level, has declined over the past 3 years from 18% to 17%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 1.6% to 5.4% over the past 5 years.
What does this mean?
Though La-Z-Boy’s past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have volatile earnings, can have many factors impacting its business. I suggest you continue to research La-Z-Boy to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for LZB’s future growth? Take a look at our free research report of analyst consensus for LZB’s outlook.
- Financial Health: Are LZB’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.
- 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 27 October 2018. 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 firstname.lastname@example.org. 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. On rare occasion, data errors may occur. Thank you for reading.