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Harley-Davidson Inc (NYSE:HOG)
Gross Profit
\$2,434 Mil (TTM As of Sep. 2016)

Harley-Davidson Inc's gross profit for the three months ended in Sep. 2016 was \$508 Mil. Harley-Davidson Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was \$2,434 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Harley-Davidson Inc's gross profit for the three months ended in Sep. 2016 was \$508 Mil. Harley-Davidson Inc's revenue for the three months ended in Sep. 2016 was \$1,275 Mil. Therefore, Harley-Davidson Inc's Gross Margin for the quarter that ended in Sep. 2016 was 39.82%.

Harley-Davidson Inc had a gross margin of 39.82% for the quarter that ended in Sep. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Harley-Davidson Inc was 41.32%. The lowest was 36.92%. And the median was 38.75%.

Definition

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

Harley-Davidson Inc's Gross Profit for the fiscal year that ended in Dec. 2014 is calculated as

 Gross Profit (A: Dec. 2014 ) = Revenue - Cost of Goods Sold = 6228.508 - 3707.077 = 2,521

Harley-Davidson Inc's Gross Profit for the quarter that ended in Sep. 2016 is calculated as

 Gross Profit (Q: Sep. 2016 ) = Revenue - Cost of Goods Sold = 1274.813 - 767.184 = 508

Harley-Davidson Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was 453.452 (Dec. 2015 ) + 717.719 (Mar. 2016 ) + 755.627 (Jun. 2016 ) + 507.629 (Sep. 2016 ) = \$2,434 Mil.

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

Harley-Davidson Inc's Gross Margin for the quarter that ended in Sep. 2016 is calculated as

 Gross Margin (Q: Sep. 2016 ) = Gross Profit (Q: Sep. 2016 ) / Revenue (Q: Sep. 2016 ) = (Revenue - Cost of Goods Sold) / Revenue = 508 / 1274.813 = 39.82 %

* 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

Harley-Davidson Inc had a gross margin of 39.82% for the quarter that ended in Sep. 2016 => 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.

Harley-Davidson Inc Annual Data

 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Gross_Profit 2,233 2,114 2,308 1,881 1,838 1,976 2,162 2,338 2,521 2,477

Harley-Davidson Inc Quarterly Data

 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Gross_Profit 850 526 438 714 780 530 453 718 756 508
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