Benzinga | Jul 29, 2021 02:24PM EDT

Return on Capital Employed Insights for Levi Strauss

After pulling data from Benzinga Pro it seems like during Q2, Levi Strauss (NYSE:LEVI) earned $106.45 million, a 39.9% increase from the preceding quarter. Levi Strauss's sales decreased to $1.28 billion, a 2.3% change since Q1. Levi Strauss earned $177.12 million, and sales totaled $1.31 billion in Q1.

What Is ROCE?

Changes in earnings and sales indicate shifts in Levi Strauss'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 Q2, Levi Strauss posted an ROCE of 0.07%.

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 Levi Strauss's case, the positive ROCE ratio will be something investors pay attention to before making long-term financial decisions.

Analyst Predictions

Levi Strauss reported Q2 earnings per share at $0.23/share, which beat analyst predictions of $0.09/share.