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Buffalo Wild Wings Inc (NAS:BWLD)
Gross Profit
$300 Mil (TTM As of Dec. 2013)

Buffalo Wild Wings Inc's gross profit for the three months ended in Dec. 2013 was $85 Mil. Buffalo Wild Wings Inc's gross profit for the trailing twelve months (TTM) ended in Dec. 2013 was $300 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Buffalo Wild Wings Inc's gross profit for the three months ended in Dec. 2013 was $85 Mil. Buffalo Wild Wings Inc's revenue for the three months ended in Dec. 2013 was $342 Mil. Therefore, Buffalo Wild Wings Inc's Gross Margin for the quarter that ended in Dec. 2013 was 24.86%.

Buffalo Wild Wings Inc had a gross margin of 24.86% for the quarter that ended in Dec. 2013 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Buffalo Wild Wings Inc was 73.79%. The lowest was 23.68%. And the median was 25.85%.

Warning Sign:

Buffalo Wild Wings Inc gross margin has been in long term decline. The average rate of decline per year is -1.5%.


Definition

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

Buffalo Wild Wings Inc's Gross Profit for the fiscal year that ended in Dec. 2013 is calculated as

Gross Profit (A: Dec. 2013 )=Revenue - Cost of Goods Sold
=1266.719 - 966.789
=300

Buffalo Wild Wings Inc's Gross Profit for the quarter that ended in Dec. 2013 is calculated as

Gross Profit (Q: Dec. 2013 )=Revenue - Cost of Goods Sold
=341.547 - 256.627
=85

Buffalo Wild Wings Inc Gross Profit for the trailing twelve months (TTM) ended in Dec. 2013 was 68.211 (Mar. 2013 ) + 71.371 (Jun. 2013 ) + 75.428 (Sep. 2013 ) + 84.92 (Dec. 2013 ) = $300 Mil.

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

Buffalo Wild Wings Inc's Gross Margin for the quarter that ended in Dec. 2013 is calculated as

Gross Margin (Q: Dec. 2013 )=Gross Profit (Q: Dec. 2013 ) / Revenue (Q: Dec. 2013 )
=(Revenue - Cost of Goods Sold) / Revenue
=85 / 341.547
=24.86 %

* 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

Buffalo Wild Wings Inc had a gross margin of 24.86% for the quarter that ended in Dec. 2013 => 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.

Buffalo Wild Wings Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 42527084109136160212252300

Buffalo Wild Wings Inc Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Gross_Profit 52576557597168717585
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