Yahoo Finance Was Ascena Retail Group Inc’s (NASDAQ:ASNA) Earnings Growth Better Than The Industry’s?
Today I will examine Ascena Retail Group Inc’s (NASDAQ:ASNA) latest earnings update (28 April 2018) and compare these figures against its performance over the past couple of years, in addition to how the rest of ASNA’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. See our latest analysis for Ascena Retail Group
How Did ASNA’s Recent Performance Stack Up Against Its Past?
To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend allows me to examine different stocks on a similar basis, using new information. For Ascena Retail Group, its latest trailing-twelve-month earnings is -US$88.70M, which, in comparison to the prior year’s figure, has become less negative. Since these figures are somewhat short-term, I have estimated an annualized five-year value for Ascena Retail Group’s net income, which stands at -US$110.75M. This suggests that, despite the fact that net income is negative, it has become less negative over the years.
We can further assess Ascena Retail Group’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Ascena Retail Group’s top-line has grown by 12.20% on average, implying that the company is in a high-growth period with expenses shooting ahead of revenues, leading to annual losses. Looking at growth from a sector-level, the US specialty retail industry has been growing, albeit, at a unexciting single-digit rate of 5.85% over the past year, and 6.15% over the past half a decade. This suggests that, even though Ascena Retail Group is currently unprofitable, it may have been aided by industry tailwinds, moving earnings into a more favorable position.
What does this mean?
Though Ascena Retail Group’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always difficult to forecast what will happen in the future and when. The most useful step is to assess company-specific issues Ascena Retail Group may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research Ascena Retail Group to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for ASNA’s future growth? Take a look at our free research report of analyst consensus for ASNA’s outlook.
Financial Health: Is ASNA’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 28 April 2018. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
