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PetSmart Inc (NAS:PETM)
Cost of Goods Sold
\$4,879 Mil (TTM As of Oct. 2014)

PetSmart Inc's cost of goods sold for the three months ended in Oct. 2014 was \$1,227 Mil. Its cost of goods sold for the trailing twelve months (TTM) ended in Oct. 2014 was \$4,879 Mil.

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin. PetSmart Inc's Gross Margin for the three months ended in Oct. 2014 was 29.45%.

Cost of Goods Sold is also directly linked to Inventory Turnover. PetSmart Inc's Inventory Turnover for the three months ended in Oct. 2014 was 1.49.

Definition

Cost of goods sold (COGS) refers to the Inventory costs of those goods a business has sold during a particular period.

PetSmart Inc Cost of Goods Sold for the trailing twelve months (TTM) ended in Oct. 2014 was 1238.868 (Jan. 2014 ) + 1198.294 (Apr. 2014 ) + 1214.822 (Jul. 2014 ) + 1226.954 (Oct. 2014 ) = \$4,879 Mil.

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Explanation

Cost of Goods Sold is directly linked to profitability of the company through Gross Margin.

PetSmart Inc's Gross Margin for the three months ended in Oct. 2014 is calculated as:

 Gross Margin = (Revenue - Cost of Goods Sold) / Revenue = (1739.117 - 1226.954) / 1739.117 = 29.45 %

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

A company that has a moat can usually maintain or even expand their Gross Margin. A company can increase its Gross Margin in two ways. It can increase the prices of the goods it sells and keeps its Cost of Goods Sold unchanged. Or it can keep the sales price unchanged and squeeze its suppliers to reduce the Cost of Goods Sold. Warren Buffett believes businesses with the power to raise prices have moats.

Cost of Goods Sold is also directly linked to another concept called Inventory Turnover:

PetSmart Inc's Inventory Turnover for the three months ended in Oct. 2014 is calculated as:

 Inventory Turnover = Cost of Goods Sold / Average Inventory = 1226.954 / 825.352 = 1.49

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Inventory Turnover measures how fast the company turns over its inventory within a year. A higher inventory turnover means the company has light inventory. Therefore the company spends less money on storage, write downs, and obsolete inventory. If the inventory is too light, it may affect sales because the company may not have enough to meet demand.

Usually retailers pile up their inventories at holiday seasons to meet the stronger demand. Therefore, the inventory of a particular quarter of a year should not be used to calculate inventory turnover. An average inventory is a better indication.

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

PetSmart Inc Annual Data

 Jan06 Jan07 Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Jan14 Jan15 COGS 2,584 2,926 3,236 3,570 3,817 4,039 4,309 4,696 4,801 4,957

PetSmart Inc Quarterly Data

 Oct12 Jan13 Apr13 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 COGS 1,147 1,286 1,181 1,191 1,190 1,239 1,198 1,215 1,227 1,317
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