AAR Corp (AIR)
Profitability ratios
Return on sales
| May 31, 2025 | Feb 28, 2025 | Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 18.98% | 18.82% | 18.80% | 18.85% | 19.07% | 19.10% | 18.76% | 18.60% | 18.59% | 18.39% | 18.32% | 18.25% | 17.21% | 16.57% | 17.29% | 17.10% | 16.70% | 14.74% | 12.39% | 12.23% |
| Operating profit margin | 6.66% | 5.84% | 4.98% | 6.94% | 6.49% | 6.43% | 6.17% | 6.11% | 6.73% | 6.74% | 6.79% | 6.79% | 5.87% | 5.40% | 6.07% | 5.69% | 5.16% | 3.04% | 0.86% | 1.12% |
| Pretax margin | 1.40% | 0.18% | 1.42% | 3.73% | 2.51% | 3.38% | 3.88% | 3.98% | 6.09% | 6.35% | 6.64% | 6.65% | 5.77% | 5.28% | 6.12% | 5.70% | 3.90% | 1.59% | -0.81% | -0.40% |
| Net profit margin | 0.45% | -0.46% | 0.41% | 2.67% | 2.00% | 2.73% | 3.14% | 3.19% | 4.53% | 4.75% | 4.97% | 4.96% | 4.32% | 3.86% | 4.28% | 3.62% | 2.17% | 0.32% | -1.16% | -0.75% |
The analysis of AAR Corp’s profitability ratios over the provided period reveals a positive trajectory in gross profit margin, increasing from 12.23% as of August 31, 2020, to a peak of approximately 19.10% on February 29, 2024. This upward trend indicates an improvement in the company’s ability to control direct costs and enhance core profitability before accounting for operating expenses, interest, and taxes.
The operating profit margin shows a similar improvement, rising from 1.12% in August 2020 to over 6.7% in late 2022 and early 2023, before experiencing some fluctuations in subsequent periods. Notably, it peaked at around 6.94% in August 2024, suggesting an operational efficiency gain over the period, although it displayed a decline towards the end of the period analyzed, with a low of approximately 4.98% in November 2024.
Pre-tax margins exemplify the company’s overall profitability before tax expenses, exhibiting a significant recovery from negative margins in 2020 to positive margins above 6% in subsequent years, peaking at 6.65% in August 2022. However, these margins declined again in late 2023 and through 2024, reaching as low as approximately 1.42% in November 2024 before rebounding slightly.
Net profit margins, which reflect the ultimate profitability after all expenses, follow a similar pattern. They moved from negative margins of approximately -0.75% in August 2020 to positive peaks exceeding 4% in late 2021 and mid-2022, indicating periods of improved profitability. Nonetheless, the net margin declined to as low as 0.41% in November 2024, alongside periods of marginal profitability or slight losses, such as a slight negative margin of -0.46% observed in February 2025.
Overall, AAR Corp demonstrated a significant improvement in profitability ratios post-2020, driven by increasing gross and operating margins, which underscores enhanced cost management and operational efficiencies. Nevertheless, recent periods illustrate some contraction in profitability, potentially reflecting increased costs, market challenges, or other operational factors impacting bottom-line performance. The trends suggest a company that successfully expanded margins over time but faces recent headwinds affecting its net profitability.
Return on investment
| May 31, 2025 | Feb 28, 2025 | Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 6.51% | 5.48% | 4.50% | 6.06% | 5.44% | 7.05% | 6.81% | 6.55% | 7.30% | 7.71% | 7.61% | 7.69% | 6.79% | 6.20% | 6.90% | 6.32% | 5.53% | 3.02% | 0.91% | 1.27% |
| Return on assets (ROA) | 0.44% | -0.43% | 0.37% | 2.33% | 1.67% | 2.99% | 3.47% | 3.42% | 4.92% | 5.43% | 5.56% | 5.62% | 5.00% | 4.43% | 4.86% | 4.02% | 2.33% | 0.32% | -1.23% | -0.85% |
| Return on total capital | 3.95% | 7.80% | 9.99% | 13.14% | 9.55% | 8.96% | 9.27% | 9.14% | 12.35% | 12.59% | 12.57% | 12.07% | 10.58% | 9.46% | 7.99% | 5.67% | 2.48% | -1.39% | -2.59% | 0.13% |
| Return on equity (ROE) | 1.03% | -1.05% | 0.89% | 5.36% | 3.89% | 5.17% | 5.90% | 5.96% | 8.21% | 8.51% | 8.85% | 8.67% | 7.61% | 6.76% | 7.39% | 6.25% | 3.67% | 0.57% | -2.28% | -1.63% |
The profitability ratios of AAR Corp over the period analyzed exhibit notable fluctuations, reflecting dynamic operational performance and potential variability in market or internal conditions.
Operating Return on Assets (Operating ROA):
Initially, the Operating ROA experienced volatility, starting at 1.27% as of August 31, 2020, decreasing to 0.91% by November 30, 2020. Subsequently, a marked improvement occurred, reaching a peak of 7.71% on February 28, 2023. This indicates a period of enhanced efficiency in generating operating income relative to assets. Following this peak, the ratio saw a decline, culminating at 5.44% on May 31, 2024, before marginally rising again to 6.51% by May 31, 2025. The trend suggests periodic strengthening and weakening of core operational profitability.
Return on Assets (ROA):
The ROA demonstrated a negative phase in early 2020, at -0.85% on August 31, 2020, deepening to -1.23% in November 2020, reflecting challenges in generating overall net income relative to total assets during that period. An improvement commenced in early 2021, turning positive with 0.32%, and continuing upward to a peak of 5.62% on August 31, 2022. Afterwards, the ratio declined consistently, reaching a low of 0.37% in November 2024, and turning slightly negative at -0.43% in February 2025 before a modest recovery to 0.44% in May 2025. The overall pattern indicates periods of net profitability interspersed with downturns, possibly due to operational or market factors.
Return on Total Capital:
This ratio shows an initial negative value of 0.13% on August 31, 2020, with subsequent improvements, notably peaking at 13.14% on August 31, 2024. Post-peak, the ratio declined to approximately 3.95% on May 31, 2025, suggesting that the company's efficiency in generating returns on the combined capital base has been volatile but with notable periods of strong performance.
Return on Equity (ROE):
The ROE experienced a decline from negative figures of approximately -1.63% on August 31, 2020, to a positive high of 8.85% on November 30, 2022, reflecting periods of profitability for shareholders. However, this trend reversed, with ROE decreasing significantly to 0.89% in November 2024, and turning negative at -1.05% in February 2025. The decline indicates that shareholders' equity has faced periods of diminished profitability, possibly influenced by operational challenges, changes in capital structure, or external market conditions.
Summary:
Overall, AAR Corp’s profitability ratios have exhibited considerable variability over the analyzed timeframe. The company experienced periods of enhanced operational efficiency and net profitability, particularly around 2022 and early 2023, followed by declines in subsequent quarters. The peaks and troughs in these ratios suggest responsiveness to internal operational factors and external market dynamics. The recent downward trend in most profitability metrics underscores the importance of ongoing operational improvements and strategic adjustments to sustain long-term profitability.