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Barnes & Noble, Inc. (NYSE:BKS)
Gross Profit
$1,664 Mil (TTM As of Jan. 2014)

Barnes & Noble, Inc.'s gross profit for the three months ended in Jan. 2014 was $603 Mil. Barnes & Noble, Inc.'s gross profit for the trailing twelve months (TTM) ended in Jan. 2014 was $1,664 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Barnes & Noble, Inc.'s gross profit for the three months ended in Jan. 2014 was $603 Mil. Barnes & Noble, Inc.'s revenue for the three months ended in Jan. 2014 was $1,996 Mil. Therefore, Barnes & Noble, Inc.'s Gross Margin for the quarter that ended in Jan. 2014 was 30.24%.

Barnes & Noble, Inc. had a gross margin of 30.24% for the quarter that ended in Jan. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Barnes & Noble, Inc. was 35.92%. The lowest was 24.60%. And the median was 28.87%.

Warning Sign:

Barnes & Noble, Inc. gross margin has been in long term decline. The average rate of decline per year is -4.4%.


Definition

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

Barnes & Noble, Inc.'s Gross Profit for the fiscal year that ended in Apr. 2013 is calculated as

Gross Profit (A: Apr. 2013 )=Revenue - Cost of Goods Sold
=6839.005 - 5156.499
=1,683

Barnes & Noble, Inc.'s Gross Profit for the quarter that ended in Jan. 2014 is calculated as

Gross Profit (Q: Jan. 2014 )=Revenue - Cost of Goods Sold
=1995.79 - 1392.349
=603

Barnes & Noble, Inc. Gross Profit for the trailing twelve months (TTM) ended in Jan. 2014 was 230.9 (Apr. 2013 ) + 368.201 (Jul. 2013 ) + 461.942 (Oct. 2013 ) + 603.441 (Jan. 2014 ) = $1,664 Mil.

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

Barnes & Noble, Inc.'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
=603 / 1995.79
=30.24 %

* 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

Barnes & Noble, Inc. had a gross margin of 30.24% for the quarter that ended in Jan. 2014 => Competition eroding margins


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.

Barnes & Noble, Inc. Annual Data

Jan04Jan05Jan06Jan07Jan08Jan09Apr10Apr11Apr12Apr13
Gross_Profit 1,3121,4871,5671,6381,6411,5811,6771,8011,9181,683

Barnes & Noble, Inc. Quarterly Data

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
Gross_Profit 472653405416482554231368462603
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