Dick’s Sporting Items Inc (NYSE:DKS) – Trying Into Dick’s Sporting Items’s Return On Capital Employed


Dick’s sporting goods (NYSE: DKS) posted profits of $ 475.81 million for the first quarter, up 63.96% from the fourth quarter. Revenue declined to $ 2.92 billion, a 6.59% decrease between quarters. In the fourth quarter, Dick’s Sporting Goods made $ 290.20 million while sales reached $ 3.12 billion.

What is the return on investment?

The return on investment is a measure of the annual profit before tax in relation to the capital employed by a company. Changes in earnings and sales indicate shifts in a company’s ROCE. A higher ROCE generally stands for successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROCE suggests the opposite. Dick’s Sporting Goods achieved a ROCE of 0.18% in the first quarter.

Remember that while ROCE is a good measure of a company’s recent performance, it is not a very reliable indicator of a company’s earnings or sales in the near future.

The ROCE is an important indicator for comparing similar companies. A relatively high ROCE shows that Dick’s Sporting Goods is potentially more efficient than other companies in its industry. If the company is making high profits from its current level of capital, some of that money can be reinvested in more capital, which usually results in higher returns and earnings per share.

In the case of Dick’s Sporting Goods, investors will look to the positive ROCE before making long-term financial decisions.

Q1 summary of results

Dick’s Sporting Goods reported earnings per share of $ 3.79 / share for the first quarter, beating analysts’ guidance of $ 1.12 / share.