The Backroom: What's the Deal with EBITDA?
Analysts, investors, and journalists scrutinize financial reports every quarter to dissect corporate performance. In recent years, brands and retailers have increasingly emphasized non-GAAP metrics, with EBITDA and its adjusted forms being the most notable. This podcast episode explores the history, controversy, and widespread application of EBITDA in the retail sector.
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Every quarter, analysts, investors, and journalists dig into earnings reports to dissect how companies are performing. Among the standard financial metrics, brands and retailers have increasingly emphasized their non-GAAP metrics over the past few years. Among the most prominent non-GAAP metrics is EBITDA and its adjusted forms.
Many companies use this metric to measure profitability even when they are in a net loss position. However, despite its popularity, EBITDA is not without its critics. Retail Dive reporter Dani James takes a deep dive into the history, controversies, and various applications of EBITDA among younger direct-to-consumer (DTC) brands.
On today's episode, the team discusses the coverage and how the prevalence of EBITDA reflects larger trends in retail.
Resource links:
- Why EBITDA is so powerful in retail
- J.C. Penney hasn't had to report financials since 2020. Here's where the retailer stands now.
- Grove Collaborative's DTC active customers decline amid profitability focus
Editor's note: This episode was produced and edited by Caroline Jansen.