Kering SA Reports Mixed Financial Results for Q2 2024, Investors Advised to Hold Stock
Kering SA, a leading company in the consumer sundries industry, recently announced its financial results for the quarter ending June 2024. The company's stock has been given a 'Hold' call by Infinhub, a financial analysis firm.
According to the financial report, Kering SA has seen a negative performance in the quarter, with a decline in net sales and operating profit. However, there are some positive aspects to the company's financials. The cost of raw materials has fallen by 0.11% year on year, indicating an improvement in the company's ability to pass on the cost to customers. This could lead to a rise in profit margin.
The company's expenditure on assets, as seen in the highest depreciation amount of EUR 1,013 million in the last five periods, may have gone into operation. This is reflected in the 7.2% growth in depreciation on a period-on-period basis, indicating that the assets are being put to productive use, which could positively impact future sales.
On the other hand, there are some areas of concern for Kering SA. The interest coverage ratio has been consistently declining in the last five periods, indicating a deteriorating ability to manage interest payments. The debt-equity ratio has also been on the rise, reaching its highest at 103.54%, which could put a strain on the company's liquidity.
The inventory turnover ratio has also been declining, indicating a slower pace of selling inventory. The company's net sales have been at their lowest in the last five periods, with a negative trend in the near term. The rising interest cost, at EUR 292 million in the last five periods, also signifies increased borrowings.
The operating profit margin has deteriorated, reaching its lowest at 28.78% in the last five periods. The pre-tax profit and net profit have also been at their lowest, with a negative trend in the near term. The company's EPS has also declined, indicating lower profitability and earnings for shareholders.
Additionally, the debtors turnover ratio has slowed down, and the company has been distributing lower dividends and a lower proportion of profits as dividends in the last five years.
Overall, Kering SA's financial performance for the quarter ending June 2024 has been mixed, with some positive and negative aspects. Investors are advised to hold their stock and closely monitor the company's future financial reports.