Sally Beauty Holdings Inc (SBH)

Return on total capital

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	307,564	325,029	287,317	296,395	311,448	337,640	409,637	437,851	426,901	418,443	426,927	300,941	268,695	258,760	255,175	373,875	443,122	458,473	445,507	427,604
Long-term debt	US$ in thousands	1,077,950	1,060,960	1,066,560	1,066,560	1,056,350	1,037,490	1,042,080	1,405,760	1,423,010	1,431,090	1,443,150	1,655,520	1,866,830	1,837,100	1,829,220	1,332,520	1,623,970	1,608,640	1,586,870	1,712,120
Total stockholders’ equity	US$ in thousands	541,340	508,748	487,712	425,888	373,298	293,636	295,871	271,866	281,021	280,741	222,270	134,833	98,866	15,443	-69,133	-53,195	2,199	-60,323	-70,465	-145,075
Return on total capital		18.99%	20.71%	18.49%	19.86%	21.78%	25.36%	30.62%	26.10%	25.05%	24.44%	25.63%	16.81%	13.67%	13.97%	14.50%	29.22%	27.25%	29.61%	29.38%	27.29%

December 31, 2023 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $307,564K ÷ ($1,077,950K + $541,340K)
= 18.99%

Sally Beauty Holdings Inc's return on total capital has shown a steady decline over the past several quarters, decreasing from 26.77% in Q2 2022 to 19.51% in Q1 2024. This trend indicates that the company's ability to generate returns from its total capital employed has weakened over time. It is crucial for the company to address this downward trend and take measures to improve the efficiency of its capital utilization to enhance profitability and create value for its stakeholders.

Peer comparison

Dec 31, 2023

Company name

Symbol

Return on total capital

Sally Beauty Holdings Inc

SBH

18.99%