Understanding how Cabbeen Fashion Limited (SEHK:2030) is performing as a company requires looking at more than just a years' earnings. Today I will run you through a basic sense check to gain perspective on how Cabbeen Fashion is doing by comparing its latest earnings with its long-term trend as well as the performance of its luxury industry peers.

See our latest analysis for Cabbeen Fashion

Was 2030's weak performance lately a part of a long-term decline?

2030's trailing twelve-month earnings (from 30 June 2019) of CN¥212m has declined by -4.9% 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 -5.1%, indicating the rate at which 2030 is growing has slowed down. What could be happening here? Well, let's look at what's going on with margins and whether the whole industry is feeling the heat.

In terms of returns from investment, Cabbeen Fashion has fallen short of achieving a 20% return on equity (ROE), recording 17% instead. However, its return on assets (ROA) of 11% exceeds the HK Luxury industry of 5.3%, indicating Cabbeen Fashion has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Cabbeen Fashion’s debt level, has declined over the past 3 years from 33% to 24%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 8.8% to 29% over the past 5 years.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors influencing its business. I recommend you continue to research Cabbeen Fashion to get a better picture of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for 2030’s future growth? Take a look at our free research report of analyst consensus for 2030’s outlook.

2. Financial Health: Are 2030’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 30 June 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.