Lamb Weston Holdings Inc (LW)
Return on total capital
| May 31, 2025 | May 31, 2024 | May 26, 2024 | May 31, 2023 | May 28, 2023 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 665,100 | 1,065,300 | 1,065,300 | 882,100 | 882,100 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 1,737,700 | 1,787,800 | 1,787,800 | 1,411,300 | 1,411,300 |
| Return on total capital | 38.27% | 59.59% | 59.59% | 62.50% | 62.50% |
May 31, 2025 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $665,100K ÷ ($—K + $1,737,700K)
= 38.27%
The Return on Total Capital (ROTC) for Lamb Weston Holdings Inc. exhibits notable fluctuations over the specified periods. As of May 28 and May 31, 2023, the ROTC was consistently reported at 62.50%. This indicates a strong capacity to generate earnings from the company's total capital at that time. Moving forward to May 26 and May 31, 2024, the ROTC declines slightly to 59.59%, suggesting a marginal decrease in the company's efficiency in utilizing its total capital to generate profits, albeit still maintaining a high-performance level.
By May 31, 2025, the ROTC drops more significantly to 38.27%. This represents a considerable reduction in the company's ability to convert its total capital into earnings, which could be indicative of operational challenges, increased capital costs, or strategic shifts impacting profitability efficiency. Overall, while the ROTC remained robust initially, recent data indicates a downward trend, warranting further analysis to identify underlying causes and potential impacts on the company's financial health and investment considerations.
Peer comparison
May 31, 2025