GMS Inc (GMS)
Profitability ratios
Return on sales
| Apr 30, 2025 | Apr 30, 2024 | Apr 30, 2023 | Apr 30, 2022 | Apr 30, 2021 | |
|---|---|---|---|---|---|
| Gross profit margin | 31.23% | 32.26% | 32.39% | 32.11% | 32.21% |
| Operating profit margin | 5.31% | 8.05% | 9.48% | 9.04% | 5.79% |
| Pretax margin | 3.16% | 6.80% | 8.40% | 7.87% | 4.16% |
| Net profit margin | 2.09% | 5.02% | 6.25% | 5.90% | 3.20% |
The profitability ratios for GMS Inc over the period from April 2021 to April 2025 exhibit a pattern of modest fluctuations with a general trend of decline in recent years.
The gross profit margin, which indicates the percentage of revenue remaining after deducting the cost of goods sold, remained relatively stable throughout the period. It hovered around approximately 32.1% to 32.4%, with a slight peak at 32.39% in April 2023 and a minor decline thereafter to 31.23% in April 2025. This stability suggests that GMS Inc has maintained consistent control over production costs relative to sales, although marginal variations could reflect changes in product mix or input costs.
The operating profit margin improved from 5.79% in April 2021 to a peak of 9.48% in April 2023, indicating enhanced operational efficiency during this period. However, it subsequently declined to 8.05% in April 2024 and further to 5.31% in April 2025. This decline post-2023 may be attributable to increased operating expenses, competitive pressures, or other operational challenges impacting profitability at the operating level.
The pretax profit margin followed a similar trajectory, increasing from 4.16% in April 2021 to 8.40% in April 2023, then decreasing to 6.80% in April 2024 and down to 3.16% in April 2025. This pattern reflects the trends observed in operating margins, with the impact of non-operating items or tax considerations potentially influencing the pretax figures.
The net profit margin, which measures the overall profitability after all expenses including taxes are deducted, demonstrated a consistent upward movement from 3.20% in April 2021 to 6.25% in April 2023. Nevertheless, it experienced a decline to 5.02% in April 2024 and further to 2.09% in April 2025. The recent contraction indicates deteriorating bottom-line profitability and possibly increased tax burdens, interest expenses, or other non-operating costs impacting net income.
Overall, GMS Inc’s profitability ratios suggest that while the company experienced a period of improved efficiency and profitability up to 2023, recent years have seen a decline in profitability margins, especially in net profitability. The stability in gross margin indicates consistent revenue generation capability, but challenges at operational and net levels highlight the need for strategic measures to sustain and enhance profitability in the future.
Return on investment
| Apr 30, 2025 | Apr 30, 2024 | Apr 30, 2023 | Apr 30, 2022 | Apr 30, 2021 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 7.64% | 11.78% | 15.46% | 13.49% | 7.69% |
| Return on assets (ROA) | 3.01% | 7.34% | 10.19% | 8.81% | 4.25% |
| Return on total capital | 0.00% | 30.79% | 40.27% | 39.73% | 23.31% |
| Return on equity (ROE) | 8.13% | 18.90% | 26.12% | 25.69% | 12.83% |
The analysis of GMS Inc.'s profitability ratios over the fiscal years ending April 30th from 2021 to 2025 reveals notable trends and fluctuations.
Operating Return on Assets (Operating ROA):
- The Operating ROA experienced a significant increase from 7.69% in 2021 to a peak of 15.46% in 2023, indicating enhanced operational efficiency and better utilization of assets during this period.
- However, there was a decline to 11.78% in 2024, signaling a potential reduction in operations efficiency or increased asset base not matched by revenue growth.
- In 2025, the Operating ROA decreased further to 7.64%, approaching levels similar to 2021, which may reflect operational challenges or asset underperformance.
Return on Assets (ROA):
- ROA followed a similar trajectory, starting at 4.25% in 2021, rising to 10.19% in 2023, indicating improved profitability relative to total assets.
- The subsequent decline to 7.34% in 2024 and further to 3.01% in 2025 signifies diminishing asset productivity or profitability downturns affecting overall asset efficiency.
Return on Total Capital:
- This ratio was notably high in 2022 and 2023 at 39.73% and 40.27%, respectively, demonstrating strong returns on the company's invested capital and effective capital management during this period.
- The decrease to 30.79% in 2024 indicates a slowdown but still reflects substantial profitability.
- The ratio drops to 0.00% in 2025, suggesting either a significant loss, a change in accounting practices, or other extraordinary circumstances impairing the return on total capital.
Return on Equity (ROE):
- The ROE showed robust growth from 12.83% in 2021 to a peak of 26.12% in 2023, highlighting effective leveraging and profitable equity utilization.
- A decline to 18.90% in 2024 indicates a reduction in shareholder returns, potentially due to decreased net income or increased equity.
- The further decline to 8.13% in 2025 reflects a significant deterioration in profitability from an equity perspective, possibly driven by operational or financial challenges.
Overall, GMS Inc. exhibited strong profitability metrics leading into 2023, with peak performance around that time. However, the subsequent years depict a downturn across all profitability ratios, culminating in a sharp decline in 2025, which warrants further investigation into the underlying causes such as operational issues, market conditions, or strategic changes affecting profitability.