Benzinga | Oct 5, 2021 12:21PM EDT

Looking Into Signet Jewelers's Return On Invested Capital

According to Benzinga Pro, during Q2, Signet Jewelers (NYSE:SIG) earned $225.40 million, a 33.61% increase from the preceding quarter. Signet Jewelers also posted a total of $1.79 billion in sales, a 5.86% increase since Q1. In Q1, Signet Jewelers earned $168.70 million, and total sales reached $1.69 billion.

What Is Return On Invested Capital?

Earnings data without context is not clear and can difficult to base trading decisions on. Return on Invested Capital (ROIC) helps to filter signal from noise by measuring yearly pre-tax profit relative to invested capital by a business. Generally, a higher ROIC suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q2, Signet Jewelers posted an ROIC of 13.17%.

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

Earnings data without context is not clear and can difficult to base trading decisions on. Return on Invested Capital (ROIC) helps to filter signal from noise by measuring yearly pre-tax profit relative to invested capital by a business. Generally, a higher ROIC suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q2, Signet Jewelers posted an ROIC of 13.17%.

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

For Signet Jewelers, the positive return on invested capital ratio of 13.17% suggests that management is allocating their capital effectively. Effective capital allocation is a positive indicator that a company will achieve more durable success and favorable long-term returns.

Analyst Predictions

Signet Jewelers reported Q2 earnings per share at $3.57/share, which beat analyst predictions of $1.62/share.