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Abercrombie & Fitch Co (NYSE:ANF)
Gross Profit
$2,158 Mil (TTM As of Oct. 2016)

Abercrombie & Fitch Co's gross profit for the six months ended in Oct. 2016 was $511 Mil. Abercrombie & Fitch Co's gross profit for the trailing twelve months (TTM) ended in Oct. 2016 was $2,158 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Abercrombie & Fitch Co's gross profit for the six months ended in Oct. 2016 was $511 Mil. Abercrombie & Fitch Co's revenue for the six months ended in Oct. 2016 was $822 Mil. Therefore, Abercrombie & Fitch Co's Gross Margin for the quarter that ended in Oct. 2016 was 62.15%.

Abercrombie & Fitch Co had a gross margin of 62.15% for the quarter that ended in Oct. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Abercrombie & Fitch Co was 66.97%. The lowest was 61.32%. And the median was 63.25%.


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. 2016 is calculated as

Gross Profit (A: Jan. 2016 )=Revenue - Cost of Goods Sold
=3518.68 - 1361.137
=2,158

Abercrombie & Fitch Co's Gross Profit for the quarter that ended in Oct. 2016 is calculated as

Gross Profit (Q: Oct. 2016 )=Revenue - Cost of Goods Sold
=821.734 - 310.995
=511

For company reported semi-annually, GuruFocus uses latest annual data as the TTM data. Abercrombie & Fitch Co Gross Profit for the trailing twelve months (TTM) ended in Oct. 2016 was $2,158 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. 2016 is calculated as

Gross Margin (Q: Oct. 2016 )=Gross Profit (Q: Oct. 2016 ) / Revenue (Q: Oct. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=511 / 821.734
=62.15 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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 62.15% for the quarter that ended in Oct. 2016 => 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 local exchange's currency.

Abercrombie & Fitch Co Annual Data

Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16
Gross_Profit 2,2092,5112,3311,8842,2172,5502,8172,5752,3142,158

Abercrombie & Fitch Co Semi-Annual Data

Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16
Gross_Profit 553567682412510560676426477511
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