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Analysts, investors and journalists dig through earnings results each quarter with the goal of dissecting companies’ performances.
Among the various standard metrics to focus on, brands and retailers have increasingly begun highlighting their non-GAAP metrics – generally accepted accounting principles — over the past several years. The highest profile non-GAAP metric is EBITDA (earnings before interest, taxes, depreciation and amortization) and its adjusted form.
Plenty of companies have used the metric to determine their profitability, even when operating with net losses. However, the measure doesn’t come without its fair share of criticism, despite its popularity. Retail Dive Reporter Dani James dug into EBITDA’s history, its controversy and various use cases among younger direct-to-consumer brands.
In today’s episode, the team talks about that coverage and how EBITDA’s prevalence plays into larger trends in the retail industry.
- Why EBITDA has such a strong hold on retail
- J.C. Penney hasn’t had to release its finances since 2020. Here’s how the retailer is doing.
- Grove Collaborative’s DTC active customers decline amid profitability focus
Editor’s note: This episode was produced and edited by Caroline Jansen.