Westwing Group (ETR:WEW) has reported a Return on Capital Employed (ROCE) of 13% for the trailing twelve months to June 2025, outperforming the Specialty Retail industry average of 9.3%. ROCE, which measures pre-tax profits generated from capital employed, is calculated as Earnings Before Interest and Tax (EBIT) divided by total assets minus current liabilities. For Westwing, this equates to €12 million ÷ (€183 million - €86 million).
© Westwing
The company has successfully transitioned from generating losses five years ago to reaching profitability, while its capital employed has remained relatively stable. Analysts suggest this improvement reflects either prior investments yielding returns or increased operational efficiency.
Despite the positive ROCE, Westwing Group's current liabilities remain high at 47% of total assets, indicating that suppliers or short-term creditors fund a significant portion of the business. While not inherently negative, this could introduce some financial risk.
Overall, the trend indicates Westwing has become more efficient and profitable, though limited growth opportunities internally may affect its potential to become a long-term multi-bagger. Investors should monitor future reinvestment opportunities to assess sustained performance.
Source: www.finance.yahoo.com
