Ralph Lauren Corp Class A (RL)

Return on total capital

		Mar 31, 2025	Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021
Earnings before interest and tax (EBIT)	US$ in thousands	1,007,400	832,100	581,200	813,000	-15,000
Long-term debt	US$ in thousands	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	2,588,500	2,450,300	2,430,500	2,536,000	2,604,400
Return on total capital		38.92%	33.96%	23.91%	32.06%	-0.58%

March 31, 2025 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $1,007,400K ÷ ($—K + $2,588,500K)
= 38.92%

Ralph Lauren Corp Class A's return on total capital has shown significant variability over the past five years. The ratio was notably negative at -0.58% as of March 31, 2021, indicating that the company was not effectively utilizing its capital to generate returns during that period. However, there was a substantial improvement in the subsequent years, with the return on total capital increasing to 32.06% as of March 31, 2022, 23.91% as of March 31, 2023, 33.96% as of March 31, 2024, and reaching 38.92% as of March 31, 2025.

This upward trend suggests that Ralph Lauren Corp Class A has been more effectively utilizing its total capital to generate returns in recent years. A higher return on total capital indicates that the company is generating more profits relative to the total capital employed, which can be a positive signal for investors and stakeholders. It is essential for the company to sustain or improve this trend to ensure long-term profitability and value creation.