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Interested In Kering SA (EPA:KER)? Here's How It Performed Recently

Simply Wall St

Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess Kering SA's (ENXTPA:KER) 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 Kering

Was KER's recent earnings decline worse than the long-term trend and the industry?

KER's trailing twelve-month earnings (from 31 December 2019) of €2.2b has declined by -17% 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 27%, indicating the rate at which KER is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s occurring with margins and whether the entire industry is facing the same headwind.

ENXTPA:KER Income Statement, March 10th 2020

In terms of returns from investment, Kering has invested its equity funds well leading to a 21% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 8.6% exceeds the FR Luxury industry of 4.5%, indicating Kering has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Kering’s debt level, has increased over the past 3 years from 9.8% to 25%.

What does this mean?

Though Kering'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 affecting its business. I recommend you continue to research Kering to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for KER’s future growth? Take a look at our free research report of analyst consensus for KER’s outlook.
  2. Financial Health: Are KER’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 31 December 2019. This may not be consistent with full year annual report figures.

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.

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. Thank you for reading.