Benzinga | Dec 13, 2021 09:46AM EST

Johnson Outdoors's Return on Invested Capital Overview

Pulled from Benzinga Pro data, Johnson Outdoors (NASDAQ:JOUT) posted Q4 earnings of $6.93 million, an increase from Q3 of 75.93%. Sales dropped to $166.26 million, a 22.15% decrease between quarters. In Q3, Johnson Outdoors earned $28.77 million, and total sales reached $213.57 million.

Why Is ROIC Significant?

Return on Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company's ROIC. A higher ROIC is generally representative of successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROIC suggests the opposite. In Q4, Johnson Outdoors posted an ROIC of 8.42%.

Keep in mind, while ROIC is a good measure of a company's recent performance, it is not a highly reliable predictor of a company's earnings or sales in the near future.

Return on Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company's ROIC. A higher ROIC is generally representative of successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROIC suggests the opposite. In Q4, Johnson Outdoors posted an ROIC of 8.42%.

Keep in mind, while ROIC is a good measure of a company's recent performance, it is not a highly reliable predictor of a company's earnings or sales in the near future.

For Johnson Outdoors, the positive return on invested capital ratio of 8.42% 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.

Upcoming Earnings Estimate

Johnson Outdoors reported Q4 earnings per share at $0.68/share, which beat analyst predictions of $0.65/share.

This article was generated by Benzinga's automated content engine and reviewed by an editor.