Choice Hotels International Inc (CHH)
Profitability ratios
Return on sales
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 79.34% | 81.96% | 80.83% | 81.68% | 82.78% | 82.25% | 83.78% | 83.34% | 82.17% | 80.24% | 77.60% | 72.47% | 73.90% | 87.19% | 88.27% | 89.75% | 87.88% | 87.62% | 87.40% | 87.21% |
| Operating profit margin | 24.29% | 26.76% | 27.60% | 30.94% | 34.14% | 38.39% | 42.36% | 42.33% | 40.11% | 34.60% | 26.58% | 16.09% | 15.72% | 20.50% | 23.79% | 28.74% | 28.58% | 27.67% | 28.98% | 30.21% |
| Pretax margin | 21.82% | 24.00% | 25.19% | 28.20% | 31.16% | 34.05% | 37.76% | 38.07% | 35.21% | 30.01% | 19.19% | 6.95% | 6.85% | 12.37% | 17.58% | 23.67% | 24.21% | 23.53% | 25.49% | 26.59% |
| Net profit margin | 16.74% | 18.42% | 19.27% | 21.50% | 23.69% | 25.72% | 28.72% | 29.19% | 27.02% | 23.80% | 15.09% | 5.72% | 9.74% | 12.92% | 18.07% | 22.27% | 19.99% | 19.44% | 20.13% | 21.08% |
Choice Hotels International Inc has shown a fluctuating trend in its profitability ratios over the past five years. The gross profit margin, representing the profitability of core operations, has generally been above 80% but has slightly declined in recent periods, indicating potential challenges in managing direct costs.
The operating profit margin, which measures profitability after accounting for operating expenses, has varied significantly, with a peak in the second quarter of 2022. The downward trend since then may suggest increasing operating expenses impacting profitability.
Similarly, the pretax margin, reflecting profitability before taxes, peaked in the second quarter of 2022 and has since declined. This decrease could be attributed to rising non-operating expenses or changes in tax liabilities affecting profitability.
The net profit margin, indicating overall profitability after all expenses, has also shown fluctuations over the years. Despite remaining above 15%, it has decreased from its peak in the second quarter of 2022. This decline may signal challenges in managing overall expenses and achieving higher bottom-line profits.
Return on investment
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 15.66% | 18.55% | 19.72% | 21.70% | 22.77% | 23.23% | 25.17% | 24.56% | 22.20% | 18.14% | 13.31% | 7.50% | 7.66% | 11.08% | 13.39% | 18.80% | 22.98% | 21.98% | 25.60% | 27.03% |
| Return on assets (ROA) | 10.79% | 12.77% | 13.77% | 15.08% | 15.80% | 15.57% | 17.06% | 16.94% | 14.96% | 12.47% | 7.55% | 2.67% | 4.75% | 6.99% | 10.17% | 14.57% | 16.07% | 15.44% | 17.78% | 18.86% |
| Return on total capital | 36.29% | 29.36% | 30.47% | 32.56% | 35.46% | 34.36% | 40.57% | 41.58% | 38.12% | 32.25% | 204.02% | 523.74% | 9.69% | 14.87% | 18.14% | 26.68% | 38.60% | 36.97% | 48.16% | 52.50% |
| Return on equity (ROE) | 726.18% | 393.67% | 541.45% | 675.59% | 214.76% | 119.76% | 85.02% | 106.15% | 108.68% | 109.71% | 124.45% | 219.71% | — | — | — | — | — | — | — | — |
Choice Hotels International Inc has demonstrated strong profitability over the periods analyzed based on its profitability ratios. The operating return on assets (Operating ROA) has shown a positive trend, starting at 7.66% in Q1 2020 and increasing to 15.66% in Q4 2023. This indicates the company's ability to generate operating profits from its assets.
The overall return on assets (ROA) also reflects a similar positive trend, starting at 4.75% in Q4 2020 and reaching 10.79% in Q4 2023. This metric shows the company's efficiency in generating profits relative to its total assets.
The return on total capital has been volatile, with a significant spike in Q4 2021 and Q1 2022, possibly due to specific financial events during that period. However, the metric has generally remained at healthy levels, indicating the company's ability to generate returns from its total capital employed.
The return on equity (ROE) has displayed substantial fluctuations throughout the periods, reaching as high as 726.18% in Q4 2023. This metric reflects the company's ability to generate profits for its shareholders relative to their equity investment.
Overall, Choice Hotels International Inc's profitability ratios suggest a strong financial performance, with the company efficiently utilizing its assets and capital to generate returns for its stakeholders.