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Measuring Flowers Foods, Inc.’s (NYSE:FLO) 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 FLO’s recent performance announced on 20 April 2019 and compare these figures to its historical trend and industry movements.
Did FLO beat its long-term earnings growth trend and its industry?
FLO’s trailing twelve-month earnings (from 20 April 2019) of US$172m has jumped 22% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -3.7%, indicating the rate at which FLO is growing has accelerated. How has it been able to do this? Well, let’s take a look at whether it is only due to industry tailwinds, or if Flowers Foods has seen some company-specific growth.
In terms of returns from investment, Flowers Foods has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. Furthermore, its return on assets (ROA) of 5.6% is below the US Food industry of 5.8%, indicating Flowers Foods’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Flowers Foods’s debt level, has declined over the past 3 years from 13% to 10.0%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 75% to 107% over the past 5 years.
What does this mean?
Flowers Foods’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Recent positive growth isn’t always indicative of a continued optimistic outlook. You should continue to research Flowers Foods to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for FLO’s future growth? Take a look at our free research report of analyst consensus for FLO’s outlook.
- Financial Health: Are FLO’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 20 April 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 email@example.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.