United Natural Foods (NYSE:UNFI) reported earnings of $107.60 million in the third quarter, up 12.4 percent from the previous quarter. Sales fell to $6.62 billion, a 3.89 percent reduction from the previous quarter. In the second quarter, United Natural Foods made $122.82 million on sales of $6.89 billion.
Why Is ROCE Important?
United Natural Foods’ Return on Capital Invested, a measure of yearly pre-tax profit relative to capital employed, has shifted as earnings and sales have changed. In general, a greater ROCE indicates that a company is growing successfully and that future earnings per share will be higher. United Natural Foods had a ROCE of 0.08 percent in the third quarter.
It’s vital to remember that ROCE assesses historical performance and isn’t intended to be used as a forecasting tool. It’s a strong indicator of a company’s previous performance, but various factors could have an immediate impact on earnings and sales.
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 United Natural Foods illustrates that having more assets can actually help the company generate higher returns, which is something investors should consider when calculating the payout from long-term financing plans.
Insights into Q3 Earnings
United Natural Foods announced $0.94 earnings per share in the third quarter, above analyst expectations of $0.88./n
