Guess? Inc. (GES)
Return on total capital
| Jan 31, 2025 | Feb 3, 2024 | Jan 31, 2024 | Jan 31, 2023 | Jan 28, 2023 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 110,540 | 245,433 | 257,304 | 254,925 | 199,302 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 550,407 | 684,940 | 684,940 | 534,113 | 534,113 |
| Return on total capital | 20.08% | 35.83% | 37.57% | 47.73% | 37.31% |
January 31, 2025 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $110,540K ÷ ($—K + $550,407K)
= 20.08%
Guess? Inc.'s return on total capital has shown variability over the period under consideration. The return on total capital was strong at 37.31% as of January 28, 2023, and increased to 47.73% by January 31, 2023. However, there was a slight decrease in the return on total capital to 37.57% by January 31, 2024, and a further decrease to 35.83% by February 3, 2024. The most notable change occurred by January 31, 2025, with a significant drop to 9.16%.
The declining trend in the return on total capital from 2023 to 2025 could indicate potential challenges in generating profits relative to the total capital employed by the company. It is essential for Guess? Inc. to further evaluate its capital allocation strategies and operational efficiency to improve the return on total capital and ensure sustainable growth in the future.