American Woodmark Corporation (AMWD)
Profitability ratios
Return on sales
| Apr 30, 2025 | Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 17.93% | 18.29% | 19.23% | 19.97% | 20.45% | 20.82% | 19.90% | 18.82% | 17.30% | 15.84% | 14.86% | 13.28% | 12.21% | 12.62% | 14.14% | 16.29% | 18.31% | 19.21% | 19.42% | 19.52% |
| Operating profit margin | 8.38% | 8.45% | 8.71% | 8.77% | 8.73% | 8.68% | 8.20% | 7.68% | 6.60% | 5.54% | 4.69% | 3.09% | 1.95% | 2.11% | 3.44% | 5.08% | 6.40% | 7.02% | 6.89% | 7.11% |
| Pretax margin | 7.40% | 7.33% | 7.72% | 7.91% | 8.23% | 8.28% | 7.57% | 7.14% | 5.94% | 4.88% | 0.76% | -1.04% | -2.31% | -3.17% | 1.76% | 3.29% | 4.44% | 5.53% | 5.30% | 5.37% |
| Net profit margin | 5.82% | 5.71% | 5.90% | 5.97% | 6.29% | 6.38% | 5.85% | 5.52% | 4.54% | 3.74% | 0.68% | -0.65% | -1.60% | -2.26% | 1.39% | 2.52% | 3.37% | 4.13% | 3.95% | 4.00% |
The profitability ratios of American Woodmark Corporation over the indicated periods reveal several noteworthy trends and patterns.
Gross Profit Margin:
American Woodmark's gross profit margin exhibits a general upward trajectory following a period of decline. From a peak of approximately 19.52% on July 31, 2020, it declined to a low of about 12.21% on April 30, 2022, indicating compressed margins potentially due to increased costs or competitive pressures. Subsequently, the margin stabilized and began to recover, reaching nearly 20.82% as of January 31, 2024. The continuous increase from mid-2022 suggests improvements in cost management or favorable product mix, culminating in near pre-pandemic levels.
Operating Profit Margin:
In the same period, operating profit margins show a significant decline from around 7.11% in July 2020 to a nadir of approximately 1.95% on April 30, 2022, reflecting challenges in controlling operating costs or revenue pressures. Post-2022, margins trend upward steadily, reaching over 8.68% by January 31, 2024. The consistent improvement indicates enhanced operational efficiency or pricing strategies reversing prior margin compression.
Pretax Margin:
The pretax margin mirrors the trend of the operating margin but exhibits more volatility, including negative margins during 2022, notably at -3.17% in January 2022. This negative pretax margin timeframe suggests periods of losses before tax effects, possibly due to heightened expenses or other exceptional items. From mid-2022 onward, pretax margins rebound into positive territory, with values exceeding 7% in recent periods, illustrating a recovery in profitability before taxes.
Net Profit Margin:
Similarly, the net profit margin experienced declines, including brief negative margins in early 2022, before rising steadily to over 6% by early 2024. The improvement in net income as a percentage of revenue indicates enhanced bottom-line performance consequent to the recovery in gross, operating, and pretax margins.
Overall Summary:
The profitability ratios demonstrate a period of stress during 2021 and early 2022, characterized by declining margins and occasional losses, likely associated with macroeconomic conditions, supply chain disruptions, or increased costs. The subsequent recovery across all profitability metrics suggests operational improvements, better cost control, and potential favorable market conditions. The recent upward trend approaching pre-pandemic levels indicates strengthening profitability and a positive outlook in the company's financial health.
Return on investment
| Apr 30, 2025 | Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 9.12% | 9.37% | 9.67% | 9.77% | 10.11% | 10.34% | 10.34% | 10.14% | 8.98% | 7.39% | 5.87% | 3.68% | 2.21% | 2.43% | 3.88% | 5.75% | 6.82% | 7.07% | 6.73% | 6.88% |
| Return on assets (ROA) | 6.33% | 6.33% | 6.54% | 6.65% | 7.29% | 7.60% | 7.37% | 7.28% | 6.17% | 4.99% | 0.86% | -0.77% | -1.82% | -2.60% | 1.57% | 2.85% | 3.59% | 4.16% | 3.86% | 3.87% |
| Return on total capital | 14.94% | 15.08% | 16.01% | 16.53% | 17.59% | 18.37% | 17.68% | 17.75% | 15.87% | 17.23% | 6.93% | 2.43% | -0.70% | -3.83% | 8.84% | 13.30% | 16.13% | 16.06% | 15.60% | 16.17% |
| Return on equity (ROE) | 10.86% | 10.95% | 11.51% | 11.82% | 12.77% | 13.33% | 12.62% | 12.47% | 10.73% | 9.26% | 1.70% | -1.59% | -3.85% | -5.52% | 3.37% | 6.14% | 7.91% | 9.03% | 8.66% | 8.93% |
The analysis of American Woodmark Corporation’s profitability ratios from the provided data reveals several noteworthy trends over the examined periods.
Operating Return on Assets (Operating ROA):
The operating ROA demonstrates a generally positive trajectory, indicating improved operational efficiency and profitability relative to assets. Starting at 6.88% as of July 31, 2020, it experienced slight fluctuations but demonstrated an upward trend, reaching approximately 10.34% by October 31, 2023. This increase suggests that the company's core operating activities have become more effective at generating income from its assets, especially evident after early 2022, where the ratio steadily increased from below 4% to over 10% by late 2023.
Return on Assets (ROA):
Overall, the ROA shows a more volatile pattern, with initial values around 3.87% in July 2020, remaining relatively stable through 2020 and early 2021. However, notable deterioration occurs starting mid-2021, with the ROA declining sharply into negative territory by January 2022, reaching -2.60%. This suggests periods of reduced overall profitability, possibly due to extraordinary expenses, impairments, or economic challenges. From early 2023 onward, there is a recovery with ROA climbing back to positive levels, peaking at 7.60% in January 2024, indicating improved overall profitability relative to total assets.
Return on Total Capital:
This ratio follows a fluctuating but generally positive trend. From a high of 16.17% in July 2020, it declines markedly through 2021, hitting negative territory (-3.83%) in January 2022, reflecting challenges in generating returns from total capital invested. Subsequently, the ratio recovers, reaching high levels above 17% during late 2022 and early 2023, before stabilizing between 14% and 18% through 2024 and into 2025. This pattern indicates periods of strain followed by recovery and sustained profitability relative to the total capital employed.
Return on Equity (ROE):
ROE exhibits an initially robust performance at around 8.93% in July 2020, with a declining trend through late 2021, reaching a low of -5.52% in January 2022. This negative performance points to periods where shareholders’ equity was not generating positive returns, potentially due to losses or high liabilities outweighing equity. From 2022 onwards, ROE steadily improves, crossing into positive territory and ascending to approximately 13.33% by January 2024. The ratio maintains a generally positive trend thereafter, reflecting improved profitability attributable to shareholders.
Summary:
Overall, American Woodmark’s profitability ratios depict a period of challenges during late 2021 and early 2022, with notably negative returns for ROA, ROE, and return on total capital. These periods likely reflect operational or market difficulties. However, there has been a marked recovery from early 2023 onwards, with ratios indicating strengthened operational efficiency and profitability. The consistent upward trend in operating ROA alongside improvements in ROA, ROE, and return on total capital suggest that the company has successfully enhanced its core operations and overall financial performance in recent periods.