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Abercrombie & Fitch Company (NYSE:ANF)
Gross Profit
$2,575 Mil (TTM As of Jan. 2014)

Abercrombie & Fitch Company's gross profit for the three months ended in Jan. 2014 was $767 Mil. Abercrombie & Fitch Company's gross profit for the trailing twelve months (TTM) ended in Jan. 2014 was $2,575 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Abercrombie & Fitch Company's gross profit for the three months ended in Jan. 2014 was $767 Mil. Abercrombie & Fitch Company's revenue for the three months ended in Jan. 2014 was $1,299 Mil. Therefore, Abercrombie & Fitch Company's Gross Margin for the quarter that ended in Jan. 2014 was 59.05%.

Abercrombie & Fitch Company had a gross margin of 59.05% for the quarter that ended in Jan. 2014 => Durable competitive advantage

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

Warning Sign:

Abercrombie & Fitch Company gross margin has been in long term decline. The average rate of decline per year is -1.3%.


Definition

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

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

Gross Profit (Q: Jan. 2014 )=Revenue - Cost of Goods Sold
=1299.137 - 532.031
=767

Abercrombie & Fitch Company Gross Profit for the trailing twelve months (TTM) ended in Jan. 2014 was 553.166 (Apr. 2013 ) + 604.122 (Jul. 2013 ) + 651.04 (Oct. 2013 ) + 767.106 (Jan. 2014 ) = $2,575 Mil.

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

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

Gross Margin (Q: Jan. 2014 )=Gross Profit (Q: Jan. 2014 ) / Revenue (Q: Jan. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=767 / 1299.137
=59.05 %

* 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 Company had a gross margin of 59.05% for the quarter that ended in Jan. 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 Company Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
Gross_Profit 1,3411,8512,2092,5112,3311,8842,2172,5502,8172,575

Abercrombie & Fitch Company Quarterly Data

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
Gross_Profit 647777541592753931553604651767
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