Korn Ferry (KFY)
Profitability ratios
Return on sales
| Apr 30, 2025 | Apr 30, 2024 | Apr 30, 2023 | Apr 30, 2022 | Apr 30, 2021 | |
|---|---|---|---|---|---|
| Gross profit margin | 26.00% | 22.12% | 90.68% | 95.04% | 95.50% |
| Operating profit margin | 12.54% | 7.62% | 11.05% | 17.78% | 8.56% |
| Pretax margin | 12.49% | 7.96% | 10.33% | 16.38% | 8.99% |
| Net profit margin | 8.91% | 6.05% | 7.32% | 12.35% | 6.29% |
The analysis of Korn Ferry’s profitability ratios over the specified periods reveals notable trends and shifts in the company's financial performance.
Gross profit margin experienced a significant decline from 95.50% in the year ending April 30, 2021, to 95.04% in 2022, followed by a further reduction to 90.68% in 2023. The downward trajectory accelerated markedly in 2024, when the gross margin plummeted to 22.12%, with a modest recovery to 26.00% projected for 2025. This sharp erosion suggests substantial changes in cost structure, pricing strategies, or product/service mix, indicating potentially increased cost pressures or a shift to lower-margin offerings.
Operating profit margin demonstrated growth from 8.56% in 2021 to a peak of 17.78% in 2022, then declined to 11.05% in 2023. The subsequent years show a further decrease to 7.62% in 2024, with a forecasted improvement to 12.54% in 2025. The fluctuations suggest variable operating efficiency, possibly influenced by market conditions or internal restructuring, with recent years reflecting challenges in maintaining operating profitability.
Pre-tax margin followed a similar pattern, rising from 8.99% in 2021 to 16.38% in 2022, then falling to 10.33% in 2023, and declining further to 7.96% in 2024. The forecast indicates a recovery to 12.49% in 2025, consistent with the trends observed in operating margin, highlighting that pre-tax profitability is directly affected by operating performance and potential non-operating factors.
Net profit margin displayed a peak in 2022 at 12.35%, up from 6.29% in 2021, but then declined to 7.32% in 2023, with a subsequent dip to 6.05% in 2024. The projection of an increase to 8.91% in 2025 suggests a partial rebound in net profitability, potentially due to improved operational efficiency or favorable tax and non-operating item effects.
Overall, the profitability ratios indicate that Korn Ferry experienced strong margins during 2021 and 2022, followed by a significant downturn commencing in 2023 and continuing into 2024. The data suggest a challenging environment impacting profitability, with signs of potential recovery expected in 2025. This pattern underscores the importance of cost management, pricing strategies, and operational efficiency initiatives moving forward.
Return on investment
| Apr 30, 2025 | Apr 30, 2024 | Apr 30, 2023 | Apr 30, 2022 | Apr 30, 2021 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 8.97% | 5.79% | 8.85% | 13.57% | 5.10% |
| Return on assets (ROA) | 6.37% | 4.60% | 5.86% | 9.42% | 3.74% |
| Return on total capital | 17.12% | 14.06% | 19.51% | 29.67% | 14.12% |
| Return on equity (ROE) | 13.18% | 9.76% | 12.71% | 21.13% | 8.38% |
The analysis of Korn Ferry's profitability ratios over the specified periods reveals a variable but generally improving trend in key performance metrics.
The Operating Return on Assets (Operating ROA) experienced a significant increase from 5.10% as of April 30, 2021, to a peak of 13.57% in 2022. Subsequently, it declined to 8.85% in 2023, further decreased to 5.79% in 2024, and then rose modestly to 8.97% in 2025. This fluctuation indicates variability in the company's operational efficiency, with a notable peak in 2022, followed by a downturn and some recovery toward 2025.
Similarly, the Return on Assets (ROA) showed substantial growth from 3.74% in 2021 to 9.42% in 2022, highlighting improved asset utilization during that period. The ratio then declined to 5.86% in 2023, decreased further to 4.60% in 2024, before increasing again to 6.37% in 2025. The pattern mirrors that of Operating ROA, suggesting that overall asset profitability experienced a cyclical trend with recovery in the most recent year.
In terms of Return on Total Capital, the ratio demonstrated notable volatility. It markedly increased from 14.12% in 2021 to a peak of 29.67% in 2022, indicating strong capital efficiency or elevated profitability from total capital employed during that year. Afterward, it declined to 19.51% in 2023, further to 14.06% in 2024, and then improved to 17.12% in 2025. The data suggest a cyclical pattern, with a substantial peak followed by a decline and partial recovery.
The Return on Equity (ROE), reflecting shareholder returns, increased significantly from 8.38% in 2021 to 21.13% in 2022, indicating a period of high profitability and effective use of equity capital. This was followed by a decline to 12.71% in 2023 and even lower levels in 2024 at 9.76%. In 2025, ROE demonstrated modest recovery, reaching 13.18%. These fluctuations suggest variations in net income relative to shareholders' equity, aligning with the overall cyclical nature observed in other ratios.
Overall, Korn Ferry's profitability ratios exhibit a pattern of substantial improvement in 2022, followed by declines in subsequent years, with some recovery trends in 2024 and 2025. The data imply that while the company experienced periods of strong profitability, recent years have been characterized by volatility, possibly reflecting changes in operational efficiency, market conditions, or strategic initiatives impacting overall profitability.