Benzinga | Jul 14, 2021 11:03AM EDT

Return On Capital Employed Overview: Helen Of Troy

Looking at Q1, Helen Of Troy (NASDAQ:HELE) earned $64.83 million, a 164.36% increase from the preceding quarter. Helen Of Troy also posted a total of $541.22 million in sales, a 6.25% increase since Q4. Helen Of Troy earned $24.52 million, and sales totaled $509.38 million in Q4.

Why ROCE Is Significant

Changes in earnings and sales indicate shifts in Helen Of Troy's Return on Capital Employed, a measure of yearly pre-tax profit relative to capital employed by a business. Generally, a higher ROCE suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q1, Helen Of Troy posted an ROCE of 0.05%.

It is important to keep in mind ROCE evaluates past performance and is not used as a predictive tool. It is a good measure of a company's recent performance, but several factors could affect earnings and sales in the near future.

Return on Capital Employed is an important measurement of efficiency and a useful tool when comparing companies that operate in the same industry. A relatively high ROCE indicates a company may be generating profits that can be reinvested into more capital, leading to higher returns and growing EPS for shareholders.

In Helen Of Troy's case, the positive ROCE ratio will be something investors pay attention to before making long-term financial decisions.

Q1 Earnings Insight

Helen Of Troy reported Q1 earnings per share at $3.48/share, which beat analyst predictions of $2.62/share.