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Ascena Retail Group Inc (NAS:ASNA)
Gross Profit
$2,745 Mil (TTM As of Apr. 2014)

Ascena Retail Group Inc's gross profit for the three months ended in Apr. 2014 was $675 Mil. Ascena Retail Group Inc's gross profit for the trailing twelve months (TTM) ended in Apr. 2014 was $2,745 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Ascena Retail Group Inc's gross profit for the three months ended in Apr. 2014 was $675 Mil. Ascena Retail Group Inc's revenue for the three months ended in Apr. 2014 was $1,145 Mil. Therefore, Ascena Retail Group Inc's Gross Margin for the quarter that ended in Apr. 2014 was 58.95%.

Ascena Retail Group Inc had a gross margin of 58.95% for the quarter that ended in Apr. 2014 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Ascena Retail Group Inc was 56.73%. The lowest was 34.24%. And the median was 37.45%.


Definition

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

Ascena Retail Group Inc's Gross Profit for the fiscal year that ended in Jul. 2013 is calculated as

Gross Profit (A: Jul. 2013 )=Revenue - Cost of Goods Sold
=4714.9 - 2066.8
=2,648

Ascena Retail Group Inc's Gross Profit for the quarter that ended in Apr. 2014 is calculated as

Gross Profit (Q: Apr. 2014 )=Revenue - Cost of Goods Sold
=1145.1 - 470.1
=675

Ascena Retail Group Inc Gross Profit for the trailing twelve months (TTM) ended in Apr. 2014 was 671.6 (Jul. 2013 ) + 710 (Oct. 2013 ) + 688.3 (Jan. 2014 ) + 675 (Apr. 2014 ) = $2,745 Mil.

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

Ascena Retail Group Inc's Gross Margin for the quarter that ended in Apr. 2014 is calculated as

Gross Margin (Q: Apr. 2014 )=Gross Profit (Q: Apr. 2014 ) / Revenue (Q: Apr. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=675 / 1145.1
=58.95 %

* 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

Ascena Retail Group Inc had a gross margin of 58.95% for the quarter that ended in Apr. 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.

Ascena Retail Group Inc Annual Data

Jul04Jul05Jul06Jul07Jul08Jul09Jul10Jul11Jul12Jul13
Gross_Profit 2833795275845585769791,6531,8792,648

Ascena Retail Group Inc Quarterly Data

Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14
Gross_Profit 477460502657662658672710688675
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