In This Article:
Understanding Caleres Inc’s (NYSE:CAL) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how Caleres is doing by evaluating its latest earnings with its longer term trend as well as its industry peers’ performance over the same period. View our latest analysis for Caleres
Did CAL’s recent earnings growth beat the long-term trend and the industry?
I prefer to 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 technique allows me to assess many different companies on a similar basis, using the latest information. For Caleres, its latest earnings (trailing twelve month) is US$84.82M, which, against the prior year’s level, has increased by 33.10%. Given that these figures may be fairly nearsighted, I have determined an annualized five-year figure for CAL’s net income, which stands at US$54.90M This means that, on average, Caleres has been able to increasingly raise its net income over the last few years as well.
What’s enabled this growth? Let’s take a look at if it is merely due to industry tailwinds, or if Caleres has seen some company-specific growth. In the last couple of years, Caleres grew its bottom line faster than revenue by efficiently controlling its costs. This brought about a margin expansion and profitability over time. Viewing growth from a sector-level, the US specialty retail industry has been growing, albeit, at a subdued single-digit rate of 4.13% in the prior twelve months, and 6.34% over the past five. This means that any recent headwind the industry is enduring, Caleres is relatively better-cushioned than its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While Caleres has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. You should continue to research Caleres to get a better picture of the stock by looking at:
-
Future Outlook: What are well-informed industry analysts predicting for CAL’s future growth? Take a look at our free research report of analyst consensus for CAL’s outlook.
-
Financial Health: Is CAL’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 03 February 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.