BJ's Wholesale Club Insights: Return On Capital Employed

BJ's Wholesale Club BJ posted Q1 earnings of $126.25 million, an increase from Q4 of 12.74%. Sales dropped to $3.87 billion, a 2.0% decrease between quarters. In Q4, BJ's Wholesale Club earned $144.69 million, and total sales reached $3.95 billion.

What Is ROCE?

Changes in earnings and sales indicate shifts in BJ's Wholesale Club's Return on Capital Employed, a measure of yearly pre-tax profit relative to capital employed by a business. Generally, a higher ROCE suggests successful growth of a company and is a sign of higher earnings per share in the future. In Q1, BJ's Wholesale Club posted an ROCE of 0.31%.

It is important to keep in mind ROCE evaluates past performance and is not used as a predictive tool. It is a good measure of a company's recent performance, but several factors could affect earnings and sales in the near future.

ROCE is an important metric for the comparison of similar companies. A relatively high ROCE shows BJ's Wholesale Club is potentially operating at a higher level of efficiency than other companies in its industry. If the company is generating high profits with its current level of capital, some of that money can be reinvested in more capital which will generally lead to higher returns and earnings per share growth.

In BJ's Wholesale Club's case, the positive ROCE ratio will be something investors pay attention to before making long-term financial decisions.

Q1 Earnings Insight

BJ's Wholesale Club reported Q1 earnings per share at $0.72/share, which beat analyst predictions of $0.57/share.