Unifirst Corporation (UNF)
Pretax margin
| Aug 26, 2023 | Aug 27, 2022 | Aug 28, 2021 | Aug 29, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before tax but after interest (EBT) | US$ in thousands | 138,837 | 134,325 | 196,871 | 177,888 | 237,924 |
| Revenue | US$ in thousands | 2,239,780 | 2,003,670 | 1,828,780 | 1,810,540 | 1,818,460 |
| Pretax margin | 6.20% | 6.70% | 10.77% | 9.83% | 13.08% |
August 26, 2023 calculation
Pretax margin = EBT ÷ Revenue
= $138,837K ÷ $2,239,780K
= 6.20%
The pretax margin is an important financial ratio that indicates the percentage of each dollar of a company's revenue that ultimately translates to pre-tax profit. It is a key measure of a company's operational efficiency and profitability before taxes.
Analyzing Unifirst Corp.'s pretax margin over the past five years, we observe a noticeable trend. The pretax margin has exhibited a gradual decline from 13.15% in 2019 to 6.22% in 2023. This downward trajectory suggests a potential deterioration in the company's ability to generate pre-tax profit relative to its revenue over the past five years.
There are several factors that could contribute to this decline in pretax margin. It could be indicative of rising operating expenses, falling gross margins, or a combination of both. Additionally, the effects of economic conditions, industry competition, and changes within the company may have also influenced this trend.
The declining pretax margin warrants further investigation and analysis to identify potential underlying issues impacting Unifirst Corp.'s profitability. This analysis could include a review of cost structures, pricing strategies, operational efficiencies, and overall financial management.
In conclusion, Unifirst Corp.'s declining pretax margin over the past five years signals a potential challenge in maintaining profitability levels relative to its revenue. Further examination and proactive measures may be necessary to address the factors contributing to this trend and to support sustainable profitability moving forward.
Peer comparison
Aug 26, 2023