Leslies Inc (LESL)
Profitability ratios
Return on sales
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | |
|---|---|---|---|
| Gross profit margin | 39.56% | 43.98% | 45.80% |
| Operating profit margin | 7.37% | 15.59% | 16.09% |
| Pretax margin | 2.65% | 13.59% | 12.55% |
| Net profit margin | 1.97% | 10.38% | 9.75% |
Leslies Inc's profitability ratios have shown a declining trend over the past three years. The gross profit margin decreased from 45.80% in 2021 to 43.98% in 2022 and further dropped to 39.56% in 2023. This indicates that the company's ability to generate profits from its core business activities has weakened over time.
Similarly, the operating profit margin has also experienced a significant decrease from 16.09% in 2021 to 15.59% in 2022 and further declined to 7.37% in 2023. This implies that Leslies Inc's operational efficiency and cost management may have deteriorated in recent years, leading to lower profitability at the operating level.
The pretax margin and net profit margin follow the same downward trend. The pretax margin decreased from 12.55% in 2021 to 13.59% in 2022 and continued to fall to 2.65% in 2023. The net profit margin also declined from 9.75% in 2021 to 10.38% in 2022 and dropped to 1.97% in 2023. These reductions suggest that the company's overall profitability and bottom-line performance have weakened over the years.
In conclusion, Leslies Inc's profitability ratios indicate a concerning trend of declining profitability, highlighting potential challenges in revenue generation, cost management, and overall operational efficiency that the company may need to address to improve its financial performance.
Return on investment
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | |
|---|---|---|---|
| Operating return on assets (Operating ROA) | 9.88% | 21.52% | 20.06% |
| Return on assets (ROA) | 2.63% | 14.33% | 12.15% |
| Return on total capital | 16.70% | 40.97% | 34.74% |
| Return on equity (ROE) | — | — | — |
Leslies Inc's profitability ratios have shown some fluctuations over the last three years.
1. Operating return on assets (Operating ROA) has decreased from 21.52% in 2022 to 9.88% in 2023, indicating a decline in the company's ability to generate operating profits from its assets efficiently.
2. Return on assets (ROA) has also decreased from 14.33% in 2022 to 2.63% in 2023, suggesting a significant drop in the company's overall profitability relative to its total assets.
3. Return on total capital has decreased from 40.97% in 2022 to 16.70% in 2023, indicating a decline in the company's ability to generate profits from its total capital investment.
Overall, the downward trend in these profitability ratios over the years raises concerns about Leslies Inc's financial performance and its efficiency in utilizing its assets and capital resources effectively to generate returns for its stakeholders. Further analysis and investigation into the company's financial strategies and operational performance may be warranted to address these declining profitability trends.