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HRG Group Inc (NYSE:HRG)
Gross Profit
$2,404 Mil (TTM As of Dec. 2015)

HRG Group Inc's gross profit for the three months ended in Dec. 2015 was $431 Mil. HRG Group Inc's gross profit for the trailing twelve months (TTM) ended in Dec. 2015 was $2,404 Mil.

Gross Margin is calculated as gross profit divided by its revenue. HRG Group Inc's gross profit for the three months ended in Dec. 2015 was $431 Mil. HRG Group Inc's revenue for the three months ended in Dec. 2015 was $1,226 Mil. Therefore, HRG Group Inc's Gross Margin for the quarter that ended in Dec. 2015 was 35.15%.

HRG Group Inc had a gross margin of 35.15% for the quarter that ended in Dec. 2015 => Competition eroding margins

During the past 13 years, the highest Gross Margin of HRG Group Inc was 52.31%. The lowest was 40.82%. And the median was 50.58%.


Definition

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

HRG Group Inc's Gross Profit for the fiscal year that ended in Sep. 2015 is calculated as

Gross Profit (A: Sep. 2015 )=Revenue - Cost of Goods Sold
=5815.9 - 3136.8
=2,679

HRG Group Inc's Gross Profit for the quarter that ended in Dec. 2015 is calculated as

Gross Profit (Q: Dec. 2015 )=Revenue - Cost of Goods Sold
=1226.2 - 795.2
=431

HRG Group Inc Gross Profit for the trailing twelve months (TTM) ended in Dec. 2015 was 641.2 (Mar. 2015 ) + 739.9 (Jun. 2015 ) + 592.1 (Sep. 2015 ) + 431 (Dec. 2015 ) = $2,404 Mil.

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

HRG Group Inc's Gross Margin for the quarter that ended in Dec. 2015 is calculated as

Gross Margin (Q: Dec. 2015 )=Gross Profit (Q: Dec. 2015 ) / Revenue (Q: Dec. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=431 / 1226.2
=35.15 %

* 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

HRG Group Inc had a gross margin of 35.15% for the quarter that ended in Dec. 2015 => 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.

HRG Group Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Sep11Sep12Sep13Sep14Sep15
Gross_Profit 000001,4202,3442,8043,0182,679

HRG Group Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
Gross_Profit 742775662867715409641740592431
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