Korn Ferry (KFY)

Profitability ratios

Return on sales

Apr 30, 2025 Jan 31, 2025 Oct 31, 2024 Jul 31, 2024 Apr 30, 2024 Jan 31, 2024 Oct 31, 2023 Jul 31, 2023 Apr 30, 2023 Jan 31, 2023 Oct 31, 2022 Jul 31, 2022 Apr 30, 2022 Jan 31, 2022 Oct 31, 2021 Jul 31, 2021 Apr 30, 2021 Jan 31, 2021 Oct 31, 2020 Jul 31, 2020
Gross profit margin 26.00% 24.25% 22.20% 38.03% 54.12% 71.08% 88.61% 89.33% 90.68% 92.27% 93.25% 94.50% 95.04% 95.43% 95.61% 95.65% 95.50% 94.98% 93.94% 93.50%
Operating profit margin 12.54% 12.03% 10.99% 8.54% 7.77% 7.13% 5.79% 9.12% 11.05% 13.41% 17.41% 17.42% 17.78% 16.88% 15.72% 14.60% 8.56% 5.36% 3.30% 3.93%
Pretax margin 12.49% 12.47% 11.98% 8.79% 7.96% 7.20% 5.47% 8.95% 10.33% 12.15% 15.38% 15.86% 16.38% 16.34% 16.10% 14.72% 8.99% 4.59% 2.01% 2.92%
Net profit margin 8.91% 9.01% 9.03% 6.68% 6.05% 5.34% 3.64% 6.24% 7.32% 8.89% 11.45% 11.92% 12.35% 12.16% 11.83% 10.68% 6.29% 2.77% 0.92% 1.70%

Korn Ferry’s profitability ratios over the period reflect significant fluctuations, indicative of evolving operational performance and margin management.

Gross profit margin experienced a steady upward trend from approximately 93.50% in July 2020 to a peak of nearly 95.65% in July 2021. This suggests efficient management of direct costs relative to revenues during this interval. Post-2021, a gradual decline commenced, with the margin decreasing consistently to approximately 88.61% in October 2023. The downward trajectory became more pronounced thereafter, culminating in substantially lower margins of around 54% in April 2024 and further dropping to 22.20% by October 2024. Although there is a partial recovery projected toward 24-26% in early 2025, the current levels indicate a considerable erosion of gross profitability, possibly due to increased cost pressures or shifts in revenue composition.

Operating profit margins mirrored the trend observed in gross margins but demonstrated more volatility. Rising sharply from 3.93% in July 2020 to a peak of 15.72% in October 2021, the margins suggest improved operational efficiency during that period. After reaching this peak, a downward movement ensued, with margins declining to around 5.79% in October 2023. The margins recovered modestly in early 2024 and early 2025, reaching approximately 12.5%, aligning with the partial gross margin recovery. The substantial decrease in operating margins post-2021 indicates rising operating expenses or margin compression affecting operational profitability.

Pretax margins followed a similar pattern, with improvements peaking at approximately 16.10% in October 2021, before declining sharply to about 5.47% in October 2023. The recovery in early 2024 and 2025 to around 12.5% signals some alleviation of pre-tax profitability pressures, although levels remain below historical highs.

Net profit margins, which incorporate all expenses, including taxes, demonstrated a peak of around 11.83% in October 2021, before descending markedly to approximately 3.64% in October 2023. The subsequent rebound to approximately 9% in 2024 and 2025 indicates variability in net profitability, possibly influenced by tax strategies, non-operating items, or other factors affecting bottom-line performance.

Overall, Korn Ferry’s profitability ratios depict a pattern of initial improvement in the early part of the analyzed period, followed by a noticeable decline from late 2021 onward, with recent data suggesting a potential partial recovery. The sustained decrease in gross and operating margins in recent periods may reflect increased cost pressures, market challenges, or changes in service delivery models, impacting the company’s ability to sustain historically high profitability levels.


Return on investment

Apr 30, 2025 Jan 31, 2025 Oct 31, 2024 Jul 31, 2024 Apr 30, 2024 Jan 31, 2024 Oct 31, 2023 Jul 31, 2023 Apr 30, 2023 Jan 31, 2023 Oct 31, 2022 Jul 31, 2022 Apr 30, 2022 Jan 31, 2022 Oct 31, 2021 Jul 31, 2021 Apr 30, 2021 Jan 31, 2021 Oct 31, 2020 Jul 31, 2020
Operating return on assets (Operating ROA) 8.97% 9.03% 8.54% 6.86% 5.91% 5.68% 4.90% 7.89% 8.85% 11.23% 15.22% 14.99% 13.57% 12.52% 11.43% 10.22% 5.10% 3.20% 2.16% 2.75%
Return on assets (ROA) 6.37% 6.77% 7.02% 5.37% 4.60% 4.26% 3.08% 5.40% 5.86% 7.45% 10.01% 10.26% 9.42% 9.02% 8.60% 7.48% 3.74% 1.66% 0.60% 1.19%
Return on total capital 18.95% 20.17% 18.30% 17.99% 16.20% 15.44% 14.34% 15.71% 19.51% 23.20% 29.57% 29.71% 29.67% 28.12% 26.48% 23.42% 14.16% 8.33% 5.27% 6.45%
Return on equity (ROE) 13.18% 13.78% 13.93% 10.56% 9.76% 8.89% 6.26% 10.61% 12.71% 15.77% 20.69% 21.01% 21.13% 19.65% 18.12% 15.53% 8.38% 3.67% 1.32% 2.56%

The provided data indicates a nuanced evolution in Korn Ferry’s profitability ratios over the period from July 2020 through October 2025, reflecting both periods of growth and contraction in earnings efficiency.

Operating Return on Assets (Operating ROA):
Initially, the Operating ROA declined from 2.75% in July 2020 to a low of 2.16% by October 2020, likely reflecting the immediate impact of external economic pressures. Subsequently, the ratio showed a marked upward trajectory, reaching a peak of 15.22% in October 2022, demonstrating substantial improvement in the company's ability to generate operating profits relative to its assets during this period. After this peak, a decline ensued, with the ratio falling to 4.90% in October 2023, potentially indicating a normalization or margin compression. In the following quarters, the ratio exhibits a modest recovery, reaching 8.54% by October 2024 and approximately 9.03% predicted for January 2025, suggesting some stabilization in operational efficiency.

Return on Assets (ROA):
A similar pattern emerges in the ROA, which decreased from 1.19% in July 2020 to 0.60% in October 2020 and then recovered significantly, peaking at 10.26% in July 2022. However, after this high point, the ROA tends to decline, reaching a low of 3.08% in October 2023. Notably, recent data indicates a rebound to 7.02% in October 2024 and an estimated 6.77% in January 2025, implying periodic recovery phases amid the overall declining trend from the earlier peak.

Return on Total Capital:
This ratio experienced notable growth from 6.45% in July 2020 to a peak of 29.71% in July 2022, reflecting increased efficiency in utilizing all invested capital during this period. The ratio declined thereafter, reaching 14.34% in October 2023 but began to recover gradually, reaching 18.30% in October 2024 and an estimated 20.17% in January 2025. The fluctuations suggest that Korn Ferry's capacity to generate returns on total capital has been volatile, possibly aligning with broader economic or industry-specific factors.

Return on Equity (ROE):
ROE exhibited a similar trend, starting at 2.56% in July 2020 and rising to a high of 21.13% in April 2022, indicating strong equity-driven profitability during this phase. Following this peak, the ratio declined substantially, to 6.26% in October 2023, possibly due to equity dilution, margin pressures, or external economic factors impacting profitability. Recently, ROE shows signs of recovery, with figures reaching 13.78% as of January 2025, reflecting improved profitability relative to shareholder equity.

Overall Assessment:
The patterns across these ratios suggest that Korn Ferry experienced a significant period of profitability growth leading up to mid-2022, characterized by improvements in operational margins and efficient capital utilization. Following the peaks, a contraction phase is observed, with ratios declining through late 2023, potentially driven by external challenges or market conditions. Recently, emerging positive trends indicate a possible stabilization or recovery in profitability metrics, underscoring the company's resilience. The oscillations across these ratios highlight a period of volatility with intermittent refocus on operational efficiency, capital utilization, and shareholder returns.