Korn Ferry (KFY)
Profitability ratios
Return on sales
| 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 | Apr 30, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 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% | 93.40% |
| Operating profit margin | 12.03% | 11.24% | 8.78% | 8.02% | 7.37% | 7.70% | 11.01% | 12.94% | 15.31% | 17.41% | 17.42% | 17.78% | 16.88% | 15.72% | 14.60% | 8.56% | 5.36% | 3.30% | 3.93% | 8.90% |
| Pretax margin | 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% | 7.63% |
| Net profit margin | 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% | 5.31% |
The analysis of Korn Ferry’s profitability ratios from April 2020 through January 2025 reveals notable trends and fluctuations across various metrics, including gross profit margin, operating profit margin, pretax margin, and net profit margin.
Gross Profit Margin:
The gross profit margin exhibits a sustained upward trend from approximately 93.4% in April 2020 to a peak of approximately 95.65% in July 2021. This indicates a period during which Korn Ferry effectively managed its direct costs relative to sales, thus maintaining high profitability at the gross level. Post-2021, the gross margin demonstrates a declining trend, dropping to approximately 88.6% by October 2023. The significant decrease becomes more apparent in the subsequent periods, with margins falling sharply to 71.08% in January 2024, and further declining to 54.12% in April 2024, then to 38.03% in July 2024, and reaching approximately 22.2% by October 2024, before a slight uptick to 24.25% in January 2025. These declines suggest increasing direct costs, pricing pressures, or changes in the revenue mix affecting gross profitability.
Operating Profit Margin:
Operating margins reflect a similar pattern. The margin increases from roughly 8.9% in April 2020 to a peak of 15.72% in October 2021, indicating operational efficiency gains during this period. Subsequently, margins decrease, falling to about 7.7% in October 2023. A notable recovery period is observed in late 2024, with margins rising to over 12% in January 2025, after reaching a low of approximately 7.37% in January 2024. The fluctuations in operating margins may be attributable to variable operating expenses, strategic initiatives, or differences in revenue composition over time.
Pre-Tax Margin:
Pre-tax margins follow a trend comparable to operating margins, ascending from approximately 7.63% in April 2020 to a high of around 16.10% in October 2021. Post-2021, pre-tax margins decline, reaching a low of approximately 5.47% in October 2023, before recovering to over 12% in the first quarter of 2025. This pattern underscores the impact of non-operating factors such as interest, taxes, and one-time items, which seem to have contributed to the significant decline and subsequent recovery in profitability.
Net Profit Margin:
The net profit margin demonstrates more volatility, starting at 5.31% in April 2020, dropping sharply to 0.92% in October 2020, and then gradually improving until reaching around 11.83% in October 2021. After this peak, margins decline again, reaching approximately 3.64% in October 2023. The margin then exhibits variability, with a recovery to over 9% by January 2025. The trends reflect the combined effects of gross, operating, and pre-tax margins, along with net-specific factors such as financial expenses, taxes, and non-recurring items influencing bottom-line profitability.
Overall Observations:
From 2020 to 2021, Korn Ferry experienced a period of high profitability at all levels, coinciding with stable gross margins and improved operational efficiency. Post-2021, there is a clear downward trend in gross, operating, pre-tax, and net margins, indicating deteriorating profitability dynamics, possibly driven by increased costs, competitive pressures, or changes in revenue streams. Despite this decline, the company demonstrates periods of recovery in early 2024 and early 2025, suggesting strategic or operational adjustments may be beginning to positively influence profitability metrics again.
In summary, the profitability ratios highlight a trajectory characterized by initial strong margins, followed by significant compression starting in late 2022, with intermittent signs of margin recovery in subsequent periods. This pattern warrants further investigation into the underlying causes—such as cost structure changes, revenue mix shifts, or macroeconomic factors—that have influenced Korn Ferry’s profitability profile over this period.
Return on investment
| 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 | Apr 30, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 9.03% | 8.74% | 7.06% | 6.09% | 5.87% | 6.51% | 9.53% | 10.37% | 12.82% | 15.22% | 14.99% | 13.57% | 12.52% | 11.43% | 10.22% | 5.10% | 3.20% | 2.16% | 2.75% | 6.42% |
| Return on assets (ROA) | 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% | 3.82% |
| Return on total capital | 20.17% | 18.30% | 17.99% | 16.20% | 15.44% | 16.49% | 22.30% | 21.68% | 25.41% | 29.57% | 29.71% | 29.67% | 28.12% | 26.48% | 23.42% | 14.16% | 8.33% | 6.56% | 7.51% | 14.94% |
| Return on equity (ROE) | 13.78% | 13.93% | 10.56% | 9.76% | 8.89% | 6.26% | 13.27% | 12.71% | 15.77% | 20.69% | 21.01% | 21.13% | 19.65% | 18.12% | 15.53% | 8.38% | 3.67% | 1.32% | 2.56% | 8.59% |
The profitability ratios of Korn Ferry over the specified period exhibit notable fluctuations, with some clear trends and variations evident across different metrics.
Operating Return on Assets (Operating ROA):
From April 2020 to October 2020, there was a substantial decline from 6.42% to 2.16%, reflecting a challenging environment that likely impacted operating efficiencies. This was followed by a modest recovery reaching 11.43% by October 2021, indicating improved operational performance. The upward trend continued through 2022, peaking at 15.22% in October 2022, suggestive of a strong operational period. Subsequently, a decline ensued, culminating at 6.51% in October 2023. Beginning in early 2024, there was a gradual recovery, reaching 9.03% by January 2025, indicating some stabilization and incremental improvement in operating profitability.
Return on Assets (ROA):
This ratio mirrors some of the fluctuations seen in Operating ROA, starting from a low of 0.60% in October 2020, and then improving significantly through 2021 and into 2022, with a peak at approximately 10.26% in July 2022. Post-2022, a decreasing trend is observed, with the ratio falling to 3.08% in October 2023. However, in early 2024, the ROA shows signs of recovery, reaching 7.02% in October 2024 before a slight decline and subsequent partial rebound at 6.77% by January 2025. Overall, ROA demonstrates periods of strong profitability interspersed with declines, reflecting variability in asset efficiency.
Return on Total Capital:
This measure exhibits a generally upward trend from 14.94% in April 2020 to a peak of 29.71% in July 2022, indicating improved overall capital efficiency and profitability during this period. After this peak, a decline occurs, reaching 16.49% in October 2023, but recovery is apparent into early 2024, with the ratio rising back above 20% by January 2025. This pattern suggests Korn Ferry experienced periods of high profitability on total capital, followed by some contraction, with signs of renewed strength in recent quarters.
Return on Equity (ROE):
ROE experienced considerable volatility, with a significant drop to 1.32% in October 2020 from 8.59% in April 2020. A notable recovery ensued, peaking at 19.65% in January 2022, reflecting favorable equity returns during that phase. Subsequently, the ratio declined sharply to 6.26% in October 2023 but showed an improvement trajectory, reaching 13.78% in January 2025. These movements highlight cyclical variations in shareholders’ return, influenced by profit levels and possibly changes in leverage and equity structure.
Summary:
Overall, Korn Ferry’s profitability ratios demonstrate a pattern of recovery after downturns, with peaks around mid-2021 to mid-2022, followed by declines and subsequent partial rebounds. The data indicates periods of strong operational and overall capital efficiency, interlaced with periods of contraction, likely driven by external economic factors or internal strategic shifts. Recent figures suggest a stabilization and moderate improvement in profitability metrics, reflecting cautious but positive trends in Korn Ferry’s ability to generate returns from assets, capital, and equity.