Frasers Group (LSE:FRAS) Operating Income : £512 Mil (TTM As of Oct. 2023)

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What is Frasers Group Operating Income?

Frasers Group's Operating Income for the six months ended in Oct. 2023 was £292 Mil. Its Operating Income for the trailing twelve months (TTM) ended in Oct. 2023 was £512 Mil.

Operating Margin % is calculated as Operating Income divided by its Revenue. Frasers Group's Operating Income for the six months ended in Oct. 2023 was £292 Mil. Frasers Group's Revenue for the six months ended in Oct. 2023 was £2,770 Mil. Therefore, Frasers Group's Operating Margin % for the quarter that ended in Oct. 2023 was 10.55%.

Good Sign:

Frasers Group PLC operating margin is expanding. Margin expansion is usually a good sign.

Frasers Group's 5-Year average Growth Rate for Operating Margin % was 15.50% per year.

Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition. Frasers Group's annualized ROC % for the quarter that ended in Oct. 2023 was 13.07%. Frasers Group's annualized ROC (Joel Greenblatt) % for the quarter that ended in Oct. 2023 was 29.70%.

Frasers Group Operating Income Historical Data

The historical data trend for Frasers Group's Operating Income can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Frasers Group Operating Income Chart

Frasers Group Annual Data

Trend

Apr14

Apr15

Apr16

Apr17

Apr18

Apr19

Apr20

Apr21

Apr22

Apr23

Operating Income

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179.50

237.10

235.60

518.70

463.70

Frasers Group Semi-Annual Data
	Apr14	Oct14	Apr15	Oct15	Apr16	Oct16	Apr17	Oct17	Apr18	Oct18	Apr19	Oct19	Apr20	Oct20	Apr21	Oct21	Apr22	Oct22	Apr23	Oct23
Operating Income	Get a 7-Day Free Trial															316.90	201.80	244.40	219.30	292.20

Frasers Group Operating Income Calculation

Operating Income, is the profit a company earned through operations. All expenses, including cash expenses such as cost of goods sold (COGS), research & development, wages, and non-cash expenses, such as depreciation, depletion and amortization, have been deducted from the sales.

Operating Income for the trailing twelve months (TTM) ended in Oct. 2023 adds up the semi-annually data reported by the company within the most recent 12 months, which was £512 Mil.

Frasers Group (LSE:FRAS) Operating Income Explanation

1. Operating Income or EBIT is linked to Return on Capital for both regular definition and Joel Greenblatt's definition.

Frasers Group's annualized ROC % for the quarter that ended in Oct. 2023 is calculated as:

	ROC % (Q: Oct. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Apr. 2023 )	+	Invested Capital (Q: Oct. 2023 ))	/ count )
=	584.4 * ( 1 - 24.37% )	/	( (3375.8	+	3388.1)	/ 2 )
=	441.98172	/	3381.95
=	13.07 %

where

	Invested Capital		(Q: Apr. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	4292.7	-	584	-	( 332.9	-	max(0, 1016.9	-	2597.2	+	332.9	))
=	3375.8

	Invested Capital		(Q: Oct. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	4641	-	986.2	-	( 266.7	-	max(0, 1257.1	-	2740.2	+	266.7	))
=	3388.1

Note: The Operating Income data used here is two times the semi-annual (Oct. 2023) data.

2. Joel Greenblatt's definition of Return on Capital:

Frasers Group's annualized ROC (Joel Greenblatt) % for the quarter that ended in Oct. 2023 is calculated as:

	ROC (Joel Greenblatt) %		(Q: Oct. 2023 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Apr. 2023		Q: Oct. 2023
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	718.2	/	( ( (1150.7 + max(1240, 0))	+	(1173.1 + max(1272.8, 0)) )	/	2 )
=	718.2	/	( ( 2390.7	+	2445.9 )	/	2 )
=	718.2	/	2418.3
=	29.70 %

where Working Capital is:

	Working Capital		(Q: Apr. 2023 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(291.5	+	1464.9	+	380.9)	-	(584	+	0	+	313.3)
=	1240

	Working Capital		(Q: Oct. 2023 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(328.6	+	1590.2	+	440.3)	-	(986.2	+	0	+	100.1)
=	1272.8

When net working capital is negative, 0 is used.

Note: The EBIT data used here is two times the semi-annual (Oct. 2023) EBIT data.

3. Operating Income is also linked to Operating Margin %:

Frasers Group's Operating Margin % for the quarter that ended in Oct. 2023 is calculated as:

Operating Margin %	=	Operating Income (Q: Oct. 2023 )	/	Revenue (Q: Oct. 2023 )
	=	292.2	/	2769.6
	=	10.55 %

4. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Operating Income growth rate using Operating Income per share data.

Be Aware

Compared with a company's EBITDA margin, Operating Margin can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).

If a company is facing competition, its Operating Margin may decline. Often the Operating Margin declines well before the company's revenue or even profit decline. Therefore, Operating Margin is a very important indicator of whether the company is facing problems.

For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokia's Operating Margin had already been in decline since 2002, although its earnings per share were still rising. Investors who paid attention to Operating Margin would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).

Therefore, Operating Margin is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.

Frasers Group Operating Income Related Terms

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Frasers Group (LSE:FRAS) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » Frasers Group PLC (LSE:FRAS) » Definitions » Operating Income

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Traded in Other Exchanges

FRASl:UK ZVX:Germany

Address

Unit A, Brook Park East, Shirebrook, GBR, NG20 8RY

Website

https://www.frasers.group

Frasers Group PLC is a U.K. sports goods retailer. The company operates stores in the United Kingdom and continental Europe, including premium lifestyle stores in the U.K. The diversified portfolio, consists of globally recognized brands, such as Dunlop, Lonsdale, Nike, Adidas, Under Armour, Puma, Karrimor, Kangol, Slazenger, Everlast, No Fear, and Firetrap, among others. Sports Direct International sells through stand-alone stores and multi-fascia retail spaces, department stores, and online. The premium lifestyle portfolio operates under the Flannels, Cruise, USC, and Van Mildert fascias.

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