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Lumber Liquidators Holdings Inc (NYSE:LL)
Gross Profit
$417 Mil (TTM As of Sep. 2014)

Lumber Liquidators Holdings Inc's gross profit for the three months ended in Sep. 2014 was $104 Mil. Lumber Liquidators Holdings Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2014 was $417 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Lumber Liquidators Holdings Inc's gross profit for the three months ended in Sep. 2014 was $104 Mil. Lumber Liquidators Holdings Inc's revenue for the three months ended in Sep. 2014 was $266 Mil. Therefore, Lumber Liquidators Holdings Inc's Gross Margin for the quarter that ended in Sep. 2014 was 39.15%.

Lumber Liquidators Holdings Inc had a gross margin of 39.15% for the quarter that ended in Sep. 2014 => Competition eroding margins

During the past 11 years, the highest Gross Margin of Lumber Liquidators Holdings Inc was 41.09%. The lowest was 32.55%. And the median was 34.80%.


Definition

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

Lumber Liquidators Holdings 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
=1000.24 - 589.257
=411

Lumber Liquidators Holdings Inc's Gross Profit for the quarter that ended in Sep. 2014 is calculated as

Gross Profit (Q: Sep. 2014 )=Revenue - Cost of Goods Sold
=266.067 - 161.909
=104

Lumber Liquidators Holdings Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2014 was 105.532 (Dec. 2013 ) + 101.287 (Mar. 2014 ) + 106.238 (Jun. 2014 ) + 104.158 (Sep. 2014 ) = $417 Mil.

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

Lumber Liquidators Holdings Inc's Gross Margin for the quarter that ended in Sep. 2014 is calculated as

Gross Margin (Q: Sep. 2014 )=Gross Profit (Q: Sep. 2014 ) / Revenue (Q: Sep. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=104 / 266.067
=39.15 %

* 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

Lumber Liquidators Holdings Inc had a gross margin of 39.15% for the quarter that ended in Sep. 2014 => 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.

Lumber Liquidators Holdings Inc Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Gross_Profit 5686110135168195216241309411

Lumber Liquidators Holdings Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Gross_Profit 78788293106106106101106104
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