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GuruFocus has detected 3 Warning Signs with Camping World Holdings Inc $CWH.
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Camping World Holdings Inc (NYSE:CWH)
Gross Profit
$999 Mil (TTM As of Dec. 2016)

Camping World Holdings Inc's gross profit for the three months ended in Dec. 2016 was $190 Mil. Camping World Holdings Inc's gross profit for the trailing twelve months (TTM) ended in Dec. 2016 was $999 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Camping World Holdings Inc's gross profit for the three months ended in Dec. 2016 was $190 Mil. Camping World Holdings Inc's revenue for the three months ended in Dec. 2016 was $627 Mil. Therefore, Camping World Holdings Inc's Gross Margin for the quarter that ended in Dec. 2016 was 30.32%.

Camping World Holdings Inc had a gross margin of 30.32% for the quarter that ended in Dec. 2016 => Competition eroding margins

During the past 4 years, the highest Gross Margin of Camping World Holdings Inc was 28.32%. The lowest was 27.49%. And the median was 28.22%.


Definition

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

Camping World Holdings Inc's Gross Profit for the fiscal year that ended in Dec. 2016 is calculated as

Gross Profit (A: Dec. 2016 )=Revenue - Cost of Goods Sold
=3526.706 - 2528.105
=999

Camping World Holdings Inc's Gross Profit for the quarter that ended in Dec. 2016 is calculated as

Gross Profit (Q: Dec. 2016 )=Revenue - Cost of Goods Sold
=626.612 - 436.633
=190

Camping World Holdings Inc Gross Profit for the trailing twelve months (TTM) ended in Dec. 2016 was 225.887 (Mar. 2016 ) + 300.634 (Jun. 2016 ) + 282.101 (Sep. 2016 ) + 189.979 (Dec. 2016 ) = $999 Mil.

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

Camping World Holdings Inc's Gross Margin for the quarter that ended in Dec. 2016 is calculated as

Gross Margin (Q: Dec. 2016 )=Gross Profit (Q: Dec. 2016 ) / Revenue (Q: Dec. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=190 / 626.612
=30.32 %

* 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

Camping World Holdings Inc had a gross margin of 30.32% for the quarter that ended in Dec. 2016 => 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 local exchange's currency.

Camping World Holdings Inc Annual Data

Dec13Dec14Dec15Dec16
Gross_Profit 000000663746903999

Camping World Holdings Inc Quarterly Data

Dec13Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
Gross_Profit 00195275259174226301282190
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