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GuruFocus has detected 4 Warning Signs with LVMH Moet Hennessy Louis Vuitton SE $LVMUY.
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LVMH Moet Hennessy Louis Vuitton SE (OTCPK:LVMUY)
Gross Profit
$25,908 Mil (TTM As of Dec. 2016)

LVMH Moet Hennessy Louis Vuitton SE's gross profit for the six months ended in Dec. 2016 was $14,019 Mil. LVMH Moet Hennessy Louis Vuitton SE's gross profit for the trailing twelve months (TTM) ended in Dec. 2016 was $25,908 Mil.

Gross Margin is calculated as gross profit divided by its revenue. LVMH Moet Hennessy Louis Vuitton SE's gross profit for the six months ended in Dec. 2016 was $14,019 Mil. LVMH Moet Hennessy Louis Vuitton SE's revenue for the six months ended in Dec. 2016 was $21,532 Mil. Therefore, LVMH Moet Hennessy Louis Vuitton SE's Gross Margin for the quarter that ended in Dec. 2016 was 65.11%.

LVMH Moet Hennessy Louis Vuitton SE had a gross margin of 65.11% for the quarter that ended in Dec. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of LVMH Moet Hennessy Louis Vuitton SE was 65.80%. The lowest was 63.85%. And the median was 64.85%.


Definition

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

LVMH Moet Hennessy Louis Vuitton SE'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
=39662.4472574 - 13754.2194093
=25,908

LVMH Moet Hennessy Louis Vuitton SE's Gross Profit for the quarter that ended in Dec. 2016 is calculated as

Gross Profit (Q: Dec. 2016 )=Revenue - Cost of Goods Sold
=21531.6455696 - 7512.65822785
=14,019

For company reported semi-annually, GuruFocus uses latest annual data as the TTM data. LVMH Moet Hennessy Louis Vuitton SE Gross Profit for the trailing twelve months (TTM) ended in Dec. 2016 was $25,908 Mil.

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

LVMH Moet Hennessy Louis Vuitton SE'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
=14,019 / 21531.6455696
=65.11 %

* 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

LVMH Moet Hennessy Louis Vuitton SE had a gross margin of 65.11% for the quarter that ended in Dec. 2016 => Durable competitive advantage


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.

LVMH Moet Hennessy Louis Vuitton SE Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Gross_Profit 15,56815,10915,87317,37620,48323,76226,05324,46025,17525,908

LVMH Moet Hennessy Louis Vuitton SE Semi-Annual Data

Jun12Dec12Jun13Dec13Jun14Dec14Jun15Dec15Jun16Dec16
Gross_Profit 10,58212,69411,84013,75912,47413,13912,15013,38212,66414,019
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