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RH (STU:RS1) ROC (Joel Greenblatt) % : 14.24% (As of Oct. 2024)


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What is RH ROC (Joel Greenblatt) %?

Joel Greenblatt defined Return on Capital differently in his book The Little Book That Still Beats the Market (Little Books. Big Profits). He defines ROC (Joel Greenblatt) % as EBIT divided by the total of Property, Plant and Equipment and net working capital. RH's annualized ROC (Joel Greenblatt) % for the quarter that ended in Oct. 2024 was 14.24%.

The historical rank and industry rank for RH's ROC (Joel Greenblatt) % or its related term are showing as below:

STU:RS1' s ROC (Joel Greenblatt) % Range Over the Past 10 Years
Min: 5.11   Med: 22.9   Max: 49.03
Current: 12

During the past 13 years, RH's highest ROC (Joel Greenblatt) % was 49.03%. The lowest was 5.11%. And the median was 22.90%.

STU:RS1's ROC (Joel Greenblatt) % is ranked worse than
50.36% of 1110 companies
in the Retail - Cyclical industry
Industry Median: 10.58 vs STU:RS1: 12.00

RH's 5-Year average Growth Rate of ROC (Joel Greenblatt) % was 0.70% per year.


RH ROC (Joel Greenblatt) % Historical Data

The historical data trend for RH's ROC (Joel Greenblatt) % 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.

RH ROC (Joel Greenblatt) % Chart

RH Annual Data
Trend Jan15 Jan16 Jan17 Jan18 Jan19 Jan20 Jan21 Jan22 Jan23 Jan24
ROC (Joel Greenblatt) %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 23.40 26.29 50.68 27.46 15.85

RH Quarterly Data
Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Apr22 Jul22 Oct22 Jan23 Apr23 Jul23 Oct23 Jan24 Apr24 Jul24 Oct24
ROC (Joel Greenblatt) % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 8.54 10.85 8.24 14.20 14.24

Competitive Comparison of RH's ROC (Joel Greenblatt) %

For the Specialty Retail subindustry, RH's ROC (Joel Greenblatt) %, along with its competitors' market caps and ROC (Joel Greenblatt) % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


RH's ROC (Joel Greenblatt) % Distribution in the Retail - Cyclical Industry

For the Retail - Cyclical industry and Consumer Cyclical sector, RH's ROC (Joel Greenblatt) % distribution charts can be found below:

* The bar in red indicates where RH's ROC (Joel Greenblatt) % falls into.



RH ROC (Joel Greenblatt) % Calculation

Joel Greenblatt defined Return on Capital differently in his book The Little Book That Still Beats the Market (Little Books. Big Profits) . He defines Return on Capital as follows:

ROC (Joel Greenblatt) %=EBIT/Average of (Net fixed Assets + Net Working Capital)

EBIT stands for Earnings Before Interest and Taxes.

Fixed Assets are also known as non-current assets. They include the Property, Plant and Equipment that the firm needs in its operation.

GuruFocus calculates net working capital as: (Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Deferred Revenue + Other Current Liabilities). We're trying to account for OPERATING assets and liabilities (part of daily business) when calculating working capital. Cash and marketable securities are considered NON-OPERATING assets and are not included in calculation. We will also back out all interest bearing debt, short term debt and the portion of long term debt that is due in the current period from the current liabilities. This debt will be considered when computing cost of capital and it would be inappropriate to count it twice.

Working Capital(Q: Jul. 2024 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(61.446 + 845.779 + 110.815) - (410.369 + 295.518 + 70.256)
=241.897

Working Capital(Q: Oct. 2024 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(57.838 + 898.312 + 94.701) - (329.817 + 302.175 + 72.025)
=346.834

When net working capital is negative, 0 is used.

So ROC (Joel Greenblatt) % of RH for the quarter that ended in Oct. 2024 can be restated as:

ROC (Joel Greenblatt) %(Q: Oct. 2024 )
=EBIT/Average of (Net fixed Assets + Net Working Capital)
=EBIT/Average of (Property, Plant and Equipment+Net Working Capital)
     Q: Jul. 2024  Q: Oct. 2024
=EBIT/( ( (Property, Plant and Equipment + Net Working Capital) + (Property, Plant and Equipment + Net Working Capital) )/ count )
=376.356/( ( (2341.011 + max(241.897, 0)) + (2356.454 + max(346.834, 0)) )/ 2 )
=376.356/( ( 2582.908 + 2703.288 )/ 2 )
=376.356/2643.098
=14.24 %

Note: The EBIT data used here is four times the quarterly (Oct. 2024) EBIT data.

* 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.


RH  (STU:RS1) ROC (Joel Greenblatt) % Explanation

The way Joel Greenblatt defines Return on Capital is a more accurate measure of how efficiently the company generates returns onthe capital actually invested in the business. EBIT is used instead of net income because the tax and interest payment may be affected by factors other than the core business operation. Intangible assets are not included in the calculation because they don't need to be replaced.

Joel Greenblatt uses his definition of Return on Capital and Earnings Yield (Joel Greenblatt) % to rank companies.


RH ROC (Joel Greenblatt) % Related Terms

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RH Business Description

Traded in Other Exchanges
Address
15 Koch Road, Suite K, Corte Madera, CA, USA, 94925
RH is a luxury furniture and lifestyle retailer operating in the $134 billion domestic furniture and home furnishing industry. The firm offers merchandise across many categories including furniture, lighting, textiles, bath, decor, and children and is growing the presence of its hospitality business with 18 restaurant locations. RH innovates, curates, and integrates products, categories, services, and businesses across channels and brand extensions (RH Modern and Waterworks, for example). RH is fully integrated across channels and is positioned to broaden its addressable market over the next decade by expanding abroad, with its World of RH digital platform (highlighting offerings outside of home furnishings), and with offerings in color, bespoke furniture, architecture, media, and more.

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