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Abercrombie & Fitch Co (NYSE:ANF)
Gross Profit
$2,399 Mil (TTM As of Oct. 2014)

Abercrombie & Fitch Co's gross profit for the three months ended in Oct. 2014 was $567 Mil. Abercrombie & Fitch Co's gross profit for the trailing twelve months (TTM) ended in Oct. 2014 was $2,399 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Abercrombie & Fitch Co's gross profit for the three months ended in Oct. 2014 was $567 Mil. Abercrombie & Fitch Co's revenue for the three months ended in Oct. 2014 was $911 Mil. Therefore, Abercrombie & Fitch Co's Gross Margin for the quarter that ended in Oct. 2014 was 62.22%.

Abercrombie & Fitch Co had a gross margin of 62.22% for the quarter that ended in Oct. 2014 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Abercrombie & Fitch Co was 66.97%. The lowest was 36.90%. And the median was 62.50%.

Warning Sign:

Abercrombie & Fitch Co gross margin has been in long term decline. The average rate of decline per year is -1.4%.


Definition

Gross Profit is the different between the sale prices and the cost of buying or producing the goods.

Abercrombie & Fitch Co's Gross Profit for the fiscal year that ended in Jan. 2014 is calculated as

Gross Profit (A: Jan. 2014 )=Revenue - Cost of Goods Sold
=4116.897 - 1541.462
=2,575

Abercrombie & Fitch Co's Gross Profit for the quarter that ended in Oct. 2014 is calculated as

Gross Profit (Q: Oct. 2014 )=Revenue - Cost of Goods Sold
=911.453 - 344.383
=567

Abercrombie & Fitch Co Gross Profit for the trailing twelve months (TTM) ended in Oct. 2014 was 767.106 (Jan. 2014 ) + 511.659 (Apr. 2014 ) + 552.956 (Jul. 2014 ) + 567.07 (Oct. 2014 ) = $2,399 Mil.

Gross Profit is the numerator in the calculation of Gross Margin:

Abercrombie & Fitch Co's Gross Margin for the quarter that ended in Oct. 2014 is calculated as

Gross Margin (Q: Oct. 2014 )=Gross Profit (Q: Oct. 2014 ) / Revenue (Q: Oct. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=567 / 911.453
=62.22 %

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

A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.


Explanation

Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.

Durable competitive advantage creates a high Gross Margin because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin

1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key

Abercrombie & Fitch Co had a gross margin of 62.22% for the quarter that ended in Oct. 2014 => Durable competitive advantage


Related Terms

Cost of Goods Sold, Gross Margin, Revenue


Historical Data

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

Abercrombie & Fitch Co Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
Gross_Profit 1,3411,8512,2092,5112,3311,8842,2122,5192,8172,575

Abercrombie & Fitch Co Quarterly Data

Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14
Gross_Profit 594732931553604651767512553567
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