Lamb Weston Holdings Inc (LW)
Profitability ratios
Return on sales
| May 26, 2024 | May 28, 2023 | May 29, 2022 | May 30, 2021 | May 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 27.34% | 26.66% | 20.58% | 22.68% | 23.63% |
| Operating profit margin | 16.49% | 16.42% | 10.99% | 12.94% | 14.70% |
| Pretax margin | 14.79% | 22.97% | 6.75% | 11.13% | 12.62% |
| Net profit margin | 11.23% | 18.78% | 4.97% | 8.66% | 9.66% |
Lamb Weston Holdings Inc has shown a consistent improvement in its profitability ratios over the past five years. The gross profit margin has gradually increased from 23.63% in 2020 to 27.34% in 2024, indicating the company's ability to efficiently manage its cost of goods sold.
Moreover, the operating profit margin has also improved steadily from 14.70% in 2020 to 16.49% in 2024, suggesting effective cost management and operational efficiency. This trend is reinforced by the pretax margin, which reflects a significant improvement from 12.62% in 2020 to 14.79% in 2024, indicating better control over operating expenses.
The net profit margin, a key indicator of overall profitability, has shown consistent growth from 9.66% in 2020 to 11.23% in 2024. This signifies that Lamb Weston Holdings Inc has been able to increase profitability after accounting for all expenses, including taxes.
Overall, the rising trend in all profitability ratios reflects the company's strong financial performance and improving operational efficiency over the years.
Return on investment
| May 26, 2024 | May 28, 2023 | May 29, 2022 | May 30, 2021 | May 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 14.46% | 13.53% | 10.73% | 11.28% | 11.94% |
| Return on assets (ROA) | 9.85% | 15.47% | 4.85% | 7.55% | 7.85% |
| Return on total capital | 59.59% | 62.50% | 123.27% | 98.79% | 232.04% |
| Return on equity (ROE) | 40.58% | 71.49% | 55.73% | 66.13% | 152.46% |
Lamb Weston Holdings Inc's profitability ratios demonstrate a fluctuating trend over the past five years. The Operating return on assets (Operating ROA) has shown a gradual increase from 10.73% in 2022 to 14.46% in 2024, indicating the company's ability to generate operating income relative to its total assets has been improving.
However, the Return on assets (ROA) has been more volatile, with a peak at 15.47% in 2023 and a trough at 4.85% in 2022. This suggests that Lamb Weston's overall profitability in relation to its total assets has been less consistent compared to its operating profitability.
The Return on total capital has fluctuated significantly over the years, ranging from 59.59% in 2024 to 232.04% in 2020. This ratio reflects the company's ability to generate returns on both equity and debt capital employed in the business.
Lastly, the Return on equity (ROE) has also shown variability, with a peak of 71.49% in 2023 and a low of 40.58% in 2024. This measure illustrates the company's ability to generate profits from the shareholders' equity invested in the business.
Overall, Lamb Weston's profitability ratios suggest a mix of strengths and weaknesses in effectively utilizing its assets and capital to generate returns for its shareholders. It may be important for the company to focus on maintaining consistent profitability and efficiency in its operations to ensure sustainable growth and value creation in the future.