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Market Overview

ROCE Insights For Bed Bath & Beyond

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During Q1, Bed Bath & Beyond's (NASDAQ: BBBY) reported sales totaled $1.31 billion. Despite a 467.6% in earnings, the company posted a loss of $460.93 million. Bed Bath & Beyond collected $3.11 billion in revenue during Q4, but reported earnings showed a $81.21 million loss.

What Is Return On Capital Employed?

Changes in earnings and sales indicate shifts in Bed Bath & Beyond’s Return on Capital Employed, a measure of yearly pre-tax profit relative to capital employed in a business. Generally, a higher ROCE suggests successful growth in a company and is a sign of higher earnings per share for shareholders in the future. In Q1, Bed Bath & Beyond posted an ROCE of -0.32%.

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.

Return on Capital Employed is an important measurement of efficiency and a useful tool when comparing companies that operate in the same industry. A relatively high ROCE indicates a company may be generating profits that can be reinvested into more capital, leading to higher returns and growing EPS for shareholders.

In Bed Bath & Beyond's case, the ROCE ratio shows the amount of assets may not be helping the company achieve higher returns. Investors may take this into account before making any long-term financial decisions.

Q1 Earnings Insight

Bed Bath & Beyond reported Q1 earnings per share at $-1.96/share, which did not meet analyst predictions of $-1.22/share.

 

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