The Chefs Warehouse Inc (CHEF)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 24.02% | 24.20% | 22.59% | 22.75% | 24.56% |
| Operating profit margin | 2.98% | 3.35% | 0.63% | -9.41% | 3.22% |
| Pretax margin | 1.64% | 1.64% | -0.39% | -11.33% | 2.06% |
| Net profit margin | 1.02% | 1.09% | -0.28% | -7.60% | 1.54% |
The Chefs Warehouse Inc's profitability ratios have shown mixed performance over the past five years. The gross profit margin has remained relatively stable, hovering around the mid-20% range, indicating consistent control over production costs and pricing strategies.
However, the operating profit margin has fluctuated more significantly, with a notable increase in 2021 followed by a decline in 2022 and 2023. This suggests that while the company has been able to generate improved profits at the operational level in certain periods, it has faced challenges in maintaining consistent profitability.
The pretax margin has also displayed volatility, with negative margins in 2020 and 2019 resulting from higher operating expenses and other factors. The company's ability to generate pre-tax profits has been erratic, indicating fluctuations in efficiency and cost management.
Similarly, the net profit margin has shown inconsistency, with negative margins in 2020 and 2019 due to higher expenses and lower revenue. While there was a moderate improvement in 2023, the margin remains relatively low, reflecting challenges in generating and retaining profits after accounting for all expenses.
Overall, The Chefs Warehouse Inc's profitability ratios suggest a need for ongoing evaluation of cost control measures, operational efficiency, and revenue generation strategies to sustain and improve profitability in the long term.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 5.92% | 5.68% | 1.01% | -10.54% | 5.00% |
| Return on assets (ROA) | 2.03% | 1.84% | -0.46% | -8.51% | 2.39% |
| Return on total capital | 9.02% | 8.13% | 1.45% | -13.82% | 7.02% |
| Return on equity (ROE) | 7.61% | 6.91% | -1.41% | -24.06% | 7.20% |
The profitability ratios of The Chefs Warehouse Inc have shown a mixed performance over the past five years.
1. Operating return on assets (Operating ROA) has been relatively stable, ranging from 5.00% to 5.92% over the period. This ratio indicates the company's ability to generate profits from its operating activities relative to its total assets.
2. Return on assets (ROA) has also shown consistency in performance, although at a lower level compared to Operating ROA. It has fluctuated between -8.51% and 2.39% during the period, reflecting the company's overall profitability in generating earnings from its total assets.
3. Return on total capital has improved steadily over the years, with the ratio increasing from -13.82% in 2020 to 9.02% in 2023. This ratio evaluates the company's ability to generate returns from its total invested capital, including both equity and debt.
4. Return on equity (ROE) has varied significantly, from a negative -24.06% in 2020 to a positive 7.61% in 2023. ROE measures the company's profitability in relation to shareholders' equity, and the improvement in this ratio indicates better returns for equity investors in recent years.
In conclusion, The Chefs Warehouse Inc has demonstrated improvements in profitability ratios, especially in Return on Total Capital and Return on Equity, indicating a better utilization of capital and equity to generate returns for investors. Monitoring these ratios over time can provide insights into the company's overall financial health and performance.