Lamb Weston Holdings Inc (LW)
Profitability ratios
Return on sales
| May 31, 2024 | May 26, 2024 | May 31, 2023 | May 28, 2023 | May 31, 2022 | |
|---|---|---|---|---|---|
| Gross profit margin | 27.32% | 27.34% | 26.77% | 26.66% | 20.30% |
| Operating profit margin | 16.47% | 16.49% | 16.49% | 16.42% | 10.84% |
| Pretax margin | 14.37% | 14.79% | 14.45% | 22.97% | 6.91% |
| Net profit margin | 11.22% | 11.23% | 18.86% | 18.78% | 4.90% |
Lamb Weston Holdings Inc has shown a consistent improvement in its profitability ratios over the years.
- Gross profit margin has steadily increased from 20.30% in May 31, 2022, to 27.32% in May 31, 2024. This indicates that the company has been able to effectively control its production costs and generate a higher percentage of revenue as gross profit.
- Operating profit margin has also exhibited a positive trend, rising from 10.84% in May 31, 2022, to 16.47% in May 31, 2024. This suggests that the company has managed its operating expenses efficiently to increase profitability.
- Pretax margin experienced a significant spike in May 28, 2023, reaching 22.97%, before stabilizing around 14-15% in the subsequent years. Although there was a drop from the peak, the company has still been able to maintain a healthy level of profit before taxes.
- Net profit margin followed a similar pattern, increasing from 4.90% in May 31, 2022, to 18.86% in May 31, 2023. However, there was a notable decline in the net profit margin in the following years to around 11%. This indicates that while the company has been profitable, there might be some challenges impacting its bottom line performance in recent years.
In conclusion, Lamb Weston Holdings Inc has displayed overall positive trends in its profitability ratios, with improvements in gross profit margin and operating profit margin. However, the fluctuations in pretax and net profit margins in recent years may warrant further investigation into the factors influencing the company's profitability.
Return on investment
| May 31, 2024 | May 26, 2024 | May 31, 2023 | May 28, 2023 | May 31, 2022 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 14.46% | 14.46% | 13.53% | 13.53% | 10.73% |
| Return on assets (ROA) | 9.85% | 9.85% | 15.47% | 15.47% | 4.85% |
| Return on total capital | 59.59% | 59.59% | 62.50% | 62.50% | 123.27% |
| Return on equity (ROE) | 40.58% | 40.58% | 71.49% | 71.49% | 55.73% |
Lamb Weston Holdings Inc's profitability ratios show a generally positive trend over the analyzed period.
- The Operating return on assets (Operating ROA) increased from 10.73% in May 2022 to 14.46% in May 2024. This indicates the company's ability to generate operating income relative to its assets improved over time.
- The Return on assets (ROA) initially increased significantly from 4.85% in May 2022 to 15.47% in May 2023, but then decreased to 9.85% by May 2024. This fluctuation may suggest some variability in the company's overall profit generation efficiency.
- Return on total capital declined from 123.27% in May 2022 to 59.59% in May 2024. Although this ratio shows a decreasing trend, it still indicates that the company is generating a positive return on its invested capital.
- Return on equity (ROE) also fluctuated, starting at 55.73% in May 2022, peaking at 71.49% in May 2023, and then dropping to 40.58% by May 2024. This metric reflects the company's ability to generate profits from shareholder equity, with the latest figure showing a decrease from the previous year.
Overall, while Lamb Weston Holdings Inc's profitability ratios demonstrate some variability, the company has shown strong profitability metrics over the analyzed period, despite some fluctuations in the return on assets and return on equity ratios.