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Today I will take a look at Globe International Limited's (ASX:GLB) most recent earnings update (30 June 2019) and compare these latest figures against its performance over the past few years, as well as how the rest of the luxury industry performed. As an investor, I find it beneficial to assess GLB’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time.
View our latest analysis for Globe International
Commentary On GLB's Past Performance
GLB's trailing twelve-month earnings (from 30 June 2019) of AU$8.2m has declined by -2.9% 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 53%, indicating the rate at which GLB is growing has slowed down. What could be happening here? Well, let’s take a look at what’s transpiring with margins and whether the entire industry is feeling the heat.
In terms of returns from investment, Globe International has fallen short of achieving a 20% return on equity (ROE), recording 18% instead. However, its return on assets (ROA) of 11% exceeds the AU Luxury industry of 5.8%, indicating Globe International has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Globe International’s debt level, has declined over the past 3 years from 18% to 18%.
What does this mean?
Globe International's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors affecting its business. I recommend you continue to research Globe International to get a better picture of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for GLB’s future growth? Take a look at our free research report of analyst consensus for GLB’s outlook.
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Financial Health: Are GLB’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.
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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.