Looking Into United Natural Foods's Return On Capital Employed

Looking at Q3, United Natural Foods UNFI earned $107.60 million, a 12.4% increase from the preceding quarter. United Natural Foods's sales decreased to $6.62 billion, a 3.89% change since Q2. United Natural Foods earned $122.82 million, and sales totaled $6.89 billion in Q2.

What Is Return On Capital Employed?

Changes in earnings and sales indicate shifts in United Natural Foods'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 Q3, United Natural Foods posted an ROCE of 0.08%.

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 United Natural Foods 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 United Natural Foods's case, the positive ROCE ratio will be something investors pay attention to before making long-term financial decisions.

Q3 Earnings Recap

United Natural Foods reported Q3 earnings per share at $0.94/share, which beat analyst predictions of $0.88/share.