Bed Bath & Beyond (NASDAQ:BBBY) reported $1.95 billion in revenue in the first quarter. Earnings dropped to a loss of $67.88 million, a 228.01 percent drop from the previous quarter. In the fourth quarter, Bed Bath & Beyond earned $53.03 million on sales of $2.62 billion.
What Is ROCE and How Does It Work?
Return on Capital Employed (ROCE) is a metric that compares a company’s annual pre-tax profit to the capital it has invested. Earnings and sales fluctuations imply changes in a company’s ROCE. A higher ROCE is indicative of a company’s successful growth and, as a result, of better earnings per share in the future. A low or negative ROCE indicates the inverse. Bed Bath & Beyond had a -0.06% ROCE in the first quarter.
Keep in mind that, while ROCE is a solid indicator of a company’s previous performance, it isn’t a very good prediction of earnings or sales in the near future.
Return on Capital Employed (ROCE) is a key indicator of efficiency and a useful metric for comparing businesses in the same industry. A high ROCE shows that a company is making profits that can be reinvested into new capital, resulting in higher returns and EPS growth for shareholders.
The return on capital employed ratio for Bed Bath & Beyond indicates that the existing level of assets may not be assisting the company in achieving higher returns, which many investors will consider when making long-term financial decisions.
Insights into Q1 Earnings
Bed Bath & Beyond reported $0.05 earnings per share in the first quarter, missing analyst expectations of $0.08 per share./n
