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GuruFocus has detected 4 Warning Signs with Express, Inc. \$EXPR.
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Express, Inc. (NYSE:EXPR)
Gross Profit
\$663 Mil (TTM As of Jan. 2017)

Express, Inc.'s gross profit for the three months ended in Jan. 2017 was \$193 Mil. Express, Inc.'s gross profit for the trailing twelve months (TTM) ended in Jan. 2017 was \$663 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Express, Inc.'s gross profit for the three months ended in Jan. 2017 was \$193 Mil. Express, Inc.'s revenue for the three months ended in Jan. 2017 was \$679 Mil. Therefore, Express, Inc.'s Gross Margin for the quarter that ended in Jan. 2017 was 28.41%.

Express, Inc. had a gross margin of 28.41% for the quarter that ended in Jan. 2017 => Competition eroding margins

During the past 10 years, the highest Gross Margin of Express, Inc. was 35.59%. The lowest was 25.32%. And the median was 32.03%.

Warning Sign:

Express, Inc. gross margin has been in long term decline. The average rate of decline per year is -2.1%.

Definition

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

Express, Inc.'s Gross Profit for the fiscal year that ended in Jan. 2017 is calculated as

 Gross Profit (A: Jan. 2017 ) = Revenue - Cost of Goods Sold = 2192.547 - 1529.343 = 663

Express, Inc.'s Gross Profit for the quarter that ended in Jan. 2017 is calculated as

 Gross Profit (Q: Jan. 2017 ) = Revenue - Cost of Goods Sold = 678.781 - 485.961 = 193

Express, Inc. Gross Profit for the trailing twelve months (TTM) ended in Jan. 2017 was 167.748 (Apr. 2016 ) + 150.919 (Jul. 2016 ) + 151.717 (Oct. 2016 ) + 192.82 (Jan. 2017 ) = \$663 Mil.

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

Express, Inc.'s Gross Margin for the quarter that ended in Jan. 2017 is calculated as

 Gross Margin (Q: Jan. 2017 ) = Gross Profit (Q: Jan. 2017 ) / Revenue (Q: Jan. 2017 ) = (Revenue - Cost of Goods Sold) / Revenue = 193 / 678.781 = 28.41 %

* 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

Express, Inc. had a gross margin of 28.41% for the quarter that ended in Jan. 2017 => Competition eroding margins

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Express, Inc. Annual Data

 Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Jan14 Jan15 Jan16 Jan17 Gross_Profit 455 457 546 678 743 743 718 661 795 663

Express, Inc. Quarterly Data

 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Gross_Profit 158 230 166 177 191 261 168 151 152 193
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