Return on Capital Employed Overview: Floor & Decor Holdings

After pulling data from Benzinga Pro it seems like during Q2, Floor & Decor Holdings FND earned $98.56 million, a 2.72% increase from the preceding quarter. Floor & Decor Holdings also posted a total of $860.11 million in sales, a 9.91% increase since Q1. In Q1, Floor & Decor Holdings earned $95.95 million, and total sales reached $782.54 million.

Why ROCE Is Significant

Changes in earnings and sales indicate shifts in Floor & Decor Holdings'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 Q2, Floor & Decor Holdings 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.

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 Floor & Decor Holdings's case, the positive ROCE ratio will be something investors pay attention to before making long-term financial decisions.

Analyst Predictions

Floor & Decor Holdings reported Q2 earnings per share at $0.73/share, which beat analyst predictions of $0.61/share.