Latest news with #businessmodel
Zawya
14 hours ago
- Business
- Zawya
Egypt: Contact's consolidated profits jump 305.4%YoY in Q1 2025
Contact Financial Holding recorded 305.408% higher consolidated net profits attributable to the owners at EGP 58.406 million in the first quarter (Q1) of 2025, according to the financial results. The quarterly profits were compared with EGP 14.406 million in Q1 2024. Earnings per share (EPS) increased to EGP 0.05 at the end of March 2025 from EGP 0.01 a year earlier. Meanwhile, net interest income jumped to EGP 269.484 million from EGP 239.178 million. As for the standalone business, the company's net losses hiked to EGP 12.174 million in Q1 2025 from EGP 3.858 million in Q1 2024. Loss per share declined to EGP 0.010 in the first three months of 2025 from EGP 0.003 in the year-ago period. Contact Financial Holding management commented: 'Contact's strong first-quarter results reflect the impact of our strategic pivot toward higher-margin products and the resilience of our business model, supported by gradually improving economic conditions.' 'The group's net income surged by an impressive 306% YoY increase, coupled with the exceptional performance from our insurance division, which recorded a 767% increase in net income to reach EGP 43mn.' © 2020-2023 Arab Finance For Information Technology. All Rights Reserved. Provided by SyndiGate Media Inc. (
Wall Street Journal
4 days ago
- Business
- Wall Street Journal
H&M Bets on AI to Upgrade Stores, Face Off Online Rivals
H&M HM.B 0.99%increase; green up pointing triangle is betting on upgrading a slimmed-down store network to regain ground lost to rivals that sell purely online, and hopes artificial intelligence will smooth out the integration of its digital operations with its physical footprint. 'Blurring the lines between digital and physical shopping and strengthening both channels is our key competitive advantage,' H&M Chief Digital Information Officer Ellen Svanstrom said in an interview. 'Although new players are emerging with different business models, we are sticking to our own.'
Yahoo
4 days ago
- Business
- Yahoo
We Like These Underlying Return On Capital Trends At CE Technology Berhad (KLSE:CETECH)
What are the early trends we should look for to identify a stock that could multiply in value over the long term? Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding base of capital employed. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. With that in mind, we've noticed some promising trends at CE Technology Berhad (KLSE:CETECH) so let's look a bit deeper. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. To calculate this metric for CE Technology Berhad, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.10 = RM16m ÷ (RM193m - RM33m) (Based on the trailing twelve months to January 2025). Therefore, CE Technology Berhad has an ROCE of 10%. In absolute terms, that's a pretty normal return, and it's somewhat close to the Luxury industry average of 9.0%. View our latest analysis for CE Technology Berhad Historical performance is a great place to start when researching a stock so above you can see the gauge for CE Technology Berhad's ROCE against it's prior returns. If you want to delve into the historical earnings , check out these free graphs detailing revenue and cash flow performance of CE Technology Berhad. We like the trends that we're seeing from CE Technology Berhad. Over the last five years, returns on capital employed have risen substantially to 10%. Basically the business is earning more per dollar of capital invested and in addition to that, 178% more capital is being employed now too. The increasing returns on a growing amount of capital is common amongst multi-baggers and that's why we're impressed. To sum it up, CE Technology Berhad has proven it can reinvest in the business and generate higher returns on that capital employed, which is terrific. Since the stock has returned a solid 51% to shareholders over the last five years, it's fair to say investors are beginning to recognize these changes. With that being said, we still think the promising fundamentals mean the company deserves some further due diligence. On a final note, we found 3 warning signs for CE Technology Berhad (2 make us uncomfortable) you should be aware of. For those who like to invest in solid companies, check out this free list of companies with solid balance sheets and high returns on equity. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Globe and Mail
5 days ago
- Business
- Globe and Mail
2 Reasons to Buy Costco Stock Like There's No Tomorrow
Costco (NASDAQ: COST) is a retailer that every investor should take the time to examine. There are two very important reasons for this, and both are logical reasons to buy the stock. However, there is also one very big reason why investors might want to wait. Here are two reasons why you might want to buy Costco, and why you also might want to wait until some future tomorrow. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » 1. Costco has a very strong business model The most important thing to remember about Costco is that it is not your typical retailer. It is a club store, which means that customers pay a yearly membership fee for the privilege of shopping at a Costco. Those membership fees are like an annuity that helps to support the company's operating profits and earnings. To put some numbers on that, in the fiscal third quarter of 2025 (ended May 11), Costco generated revenue of $63.2 billion and had an operating profit of about $2.5 billion. That said, it generated around $1.2 billion in revenue from membership fees, which is nearly half of the operating profit. That's the norm, noting that there is little cost associated with membership fees. Most of the operating costs are for buying products to sell and staffing the stores that sell those products. So membership fees really do drop right down to the operating income line. This gives the retailer a huge amount of flexibility when it comes to product pricing. Essentially, the big goal is really to keep customers happy so they continue to pay their membership dues. Those dues, in turn, allow Costco to provide the low prices that keep its customers happy. With an over 90% renewal rate, Costco is clearly giving its customers what they want. This differentiated business model is probably the biggest reason to buy Costco. 2. Costco is performing very well Another reason to like Costco right now is the strength of the business today. In Q3, the company's sales grew 8%. Same-store sales were higher by 5.7%. Traffic was up 5.2%. And customers bought 0.4% more on each visit. That's pretty impressive, given the economic uncertainty today. Compare this to retailers like Target that saw sales fall year over year in its most recent quarterly results. The negative retail backdrop has also benefited dollar stores, which are serving more and more customers that are trading down to stores with lower price points. But new dollar store customers can trade back up to higher-priced stores quickly and easily, which is a negative compared to the year-long memberships Costco's customers are paying. Basically, Costco is hitting it out of the park right now. Yes, a lot of that has to do with its low prices, but that just speaks to the strength of its overall business model. A problem with Costco to consider So there are two very good reasons to buy Costco like there's no tomorrow. But there's also one very big reason to not buy it, and that's valuation. Wall Street is very well aware of the business strength here and how well the retailer is performing right now. The price-to-sales and price-to-earnings ratios are both above their five-year averages. The stock price, meanwhile, is near all-time highs. Costco is a growing business, noting that it continues to open new stores. That may be enough to keep aggressive growth investors interested. But if you care about valuation, Costco will be a tough sell. Many investors will probably want to keep it on their wish list, hoping for a drawdown. The last notable drop, which was more than 25%, came in 2022. So patience can pay with Costco. Most investors will probably want to wait At the end of the day, the big reason to buy Costco is that it is a great business. That is as true today as it was yesterday. And it will be the same story tomorrow, as well. The problem is that even great businesses can be bad investments if you pay too much for them, to paraphrase famed value investor Benjamin Graham. Given Costco's long history of growth, paying too much today may not be the worst thing. But if you wait for a deep drawdown you'll probably be a much happier shareholder. Should you invest $1,000 in Costco Wholesale right now? Before you buy stock in Costco Wholesale, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Costco Wholesale wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $653,702!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $870,207!* Now, it's worth noting Stock Advisor 's total average return is988% — a market-crushing outperformance compared to172%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 9, 2025
Forbes
6 days ago
- Business
- Forbes
Should We Standardize Non-GAAP Reporting?
There is a weak case at best for standardizing non-financial KPIs such as same store sales. Leave the rest of the existing regulation as is. Standardizing Regulators have long struggled with whether and how to standardize non-GAAP reporting. The SEC, via Regulation G and additional rules in 2016, put in common-sense rules on non-GAAP numbers requiring firms to reconcile the non-GAAP number to the GAAP number. In addition, the SEC requires that: (i) the firm cannot present misleading non-GAAP numbers, defined mostly as excluding normal, recurring, cash operating expenses necessary to operate a firm's business; (ii) the firm cannot present inconsistent non-GAAP measure across periods; (ii) the non-GAAP measure cannot exclude gains; and (iv) non-GAAP numbers should clearly label the adjustment. The policy question is whether we should go beyond this? The FASB has a proposal asking whether they need to do something about standardizing financial KPIs. One hypothesis would be that non-GAAP numbers are not all useless or fudged in that the exclusions and inclusions signal information (however costly). There is a fair amount of academic research supporting this perspective. Some complain that GAAP has become excessively restrictive, and we need to give firms leeway to communicate the idiosyncratic aspects of the business model via non-GAAP numbers. The opposing camp would argue that these adjustments to GAAP numbers are opportunistic, and the policy maker must protect the uninformed investors from such opportunism. So, what should the policy maker do? The reality, I suspect, lies somewhere in the middle. Some exclusions potentially make business sense. One-time items, say a litigation settlement, potentially mess with an analyst's projection of continuing performance. As long as that exclusion is disclosed, I can live with that exclusion. However, excluding depreciation, interest expense and taxes, which are normal business expenses, personally make little business sense to me. I often joke in class with my students, 'imagine a world where the student does not pay interest on student loans, does not pay NYC city, NY state and federal taxes, and pays no rent (loosely the capacity cost or DA in EBITDA). Of course, you are rich after these exclusions.' I suggest a mid-way compromise: (i) leave non-GAAP numbers as is, as long as the firm reconciles the non-GAAP number to the GAAP number and follows the SEC's earlier guidance on consistency; (ii) if there is no comparable GAAP number, such as same store sales or the number of subscribers and customers, there may be some value to standardizing what same store sales might look like, for instance, in the retail industry. Consider same store sales disclosure for Home Depot in the 10-K of 2024 and compare that to Lowes, its closest competitor. Home Depot reports something called, 'comparable sales,' defined as: 'Comparable Sales. Comparable sales is a measure that highlights the performance of our existing locations and websites by measuring the change in net sales for a period over the comparable prior period of equivalent length. Comparable sales includes sales at all locations, physical and online, open greater than 52 weeks (including remodels and relocations) and excludes closed stores. Retail stores become comparable on the Monday following their 52 week of operation. Acquisitions are typically included in comparable sales after they have been owned for more than 52 weeks. Our comparable sales results for fiscal 2024 exclude the 53rd week and compare weeks 1 through 52 in fiscal 2024 to the 52-week period reported for fiscal 2023. The method of calculating comparable sales varies across the retail industry. As a result, our method of calculating comparable sales may not be the same as similarly titled measures reported by other companies. Total comparable sales decreased 1.8% in fiscal 2024, reflecting a 1.0% decrease in comparable customer transactions and a 0.9% decrease in comparable average ticket compared to fiscal 2023.' Lowes reports, in its annual report for 2024, 'A comparable location is defined as a retail location that has been open longer than 13 months. A location that is identified for relocation is no longer considered comparable in the month of its relocation. The relocated location must then remain open longer than 13 months to be considered comparable. A location we have decided to close is no longer considered comparable as of the beginning of the month in which we announce its closing. Operating locations which are sold are included in comparable sales until the date of sale. Comparable sales include online sales, which positively impacted comparable sales in fiscal 2024, fiscal 2023, and fiscal 2022 by approximately 50 basis points, 25 basis points, and 45 basis points, respectively. The comparable sales calculation for fiscal 2022 was calculated using sales for a comparable 52-week period.' Even for two very similar, closely tracked peers such as Home Depot and Lowe's, there are subtle differences in comparability in the 'comparable' sales numbers: One of the challenges of standardizing non-financial KPIs is that these KPIs are likely to differ depending on the industries using them. Retail uses same store sales. Streaming services and cable companies report number of subscribers. Airlines use available seat miles. Does the rule maker want to get into the business of regulating KPIs by industry? Standardization can cause new problems Trevor Harris, emeritus professor at Columbia Business School, my colleague worries, 'standardization of non-GAAP numbers is going to cause more issues. I think part of the general problem is that people want everything in a summary statistic which cannot really work, and we assume all investors use the measures being reported. So, part of the answer is to put some of the responsibility back on investors instead of adding more regulation which will never cover everything. When I created economically consistent measures in Model Ware at Morgan Stanley, there were many cases where I had to arbitrate and provide consistency. No regulation can deal with all the idiosyncrasies in complex companies. Another dimension of this is why is comparability a holy grail? Lowes and Home Depot are more similar, but not homogenous. If people cannot adjust for 52 versus 53 weeks, why add more burden on the companies if they don't operate that way?' An ex-standard setter, who wished to stay anonymous, points out another important wrinkle - the constant pressure from industry to adopt income-increasing metrics or rules that make companies look good: 'If I was in charge of the FASB, I might think twice about taking on such a project. An example was earnings per share. It was the first GAAP metric and at one time was viewed as critical to investment decision making. Because many believed it was critical to investment decision making, the gaming of the standard became a popular sport. So much so, that the FASB was constantly trying to issue guidance to address the most recent scheme to boost EPS. The literature became voluminous and complex. A former FASB Chairman told me that he believed the EPS standard was one of the FASB's biggest mistakes and that in his view the FASB should not set standards for how to compute metrics used by investors.' In sum, there is a weak case at best for some kind of standardization of non-financial KPIs. On balance, I suggest we leave Regulation G and the SEC's 2016 rules as is. In my view, these rules strike a reasonable balance between giving firms discretion to tell their story without giving investors information to detect managerial opportunism.
