Does Floor & Decor Holdings, Inc.’s (NYSE:FND) Past Performance Indicate A Weaker Future?

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Measuring Floor & Decor Holdings, Inc.’s (NYSE:FND) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess FND’s recent performance announced on 28 March 2019 and compare these figures to its historical trend and industry movements.

See our latest analysis for Floor & Decor Holdings

Commentary On FND’s Past Performance

FND’s trailing twelve-month earnings (from 28 March 2019) of US$115m has declined by -6.7% 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 42%, indicating the rate at which FND is growing has slowed down. Why could this be happening? Let’s examine what’s occurring with margins and whether the entire industry is experiencing the hit as well.

NYSE:FND Income Statement, July 4th 2019
NYSE:FND Income Statement, July 4th 2019

In terms of returns from investment, Floor & Decor Holdings has fallen short of achieving a 20% return on equity (ROE), recording 19% instead. However, its return on assets (ROA) of 6.7% exceeds the US Specialty Retail industry of 5.6%, indicating Floor & Decor Holdings has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Floor & Decor Holdings’s debt level, has declined over the past 3 years from 11% to 9.1%.

What does this mean?

Though Floor & Decor Holdings’s past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have unpredictable earnings, can have many factors impacting its business. I suggest you continue to research Floor & Decor Holdings to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for FND’s future growth? Take a look at our free research report of analyst consensus for FND’s outlook.
  2. Financial Health: Are FND’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 28 March 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.