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Office Depot Inc (NAS:ODP)
Gross Profit
$3,143 Mil (TTM As of Sep. 2016)

Office Depot Inc's gross profit for the three months ended in Sep. 2016 was $726 Mil. Office Depot Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was $3,143 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Office Depot Inc's gross profit for the three months ended in Sep. 2016 was $726 Mil. Office Depot Inc's revenue for the three months ended in Sep. 2016 was $2,836 Mil. Therefore, Office Depot Inc's Gross Margin for the quarter that ended in Sep. 2016 was 25.60%.

Office Depot Inc had a gross margin of 25.60% for the quarter that ended in Sep. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Office Depot Inc was 30.96%. The lowest was 23.36%. And the median was 28.40%.

Warning Sign:

Office Depot Inc gross margin has been in long term decline. The average rate of decline per year is -5.2%.


Definition

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

Office Depot 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
=16096 - 12320
=3,776

Office Depot 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
=2836 - 2110
=726

Office Depot Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was 814 (Dec. 2015 ) + 856 (Mar. 2016 ) + 747 (Jun. 2016 ) + 726 (Sep. 2016 ) = $3,143 Mil.

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

Office Depot 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
=726 / 2836
=25.60 %

* 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

Office Depot Inc had a gross margin of 25.60% for the quarter that ended in Sep. 2016 => 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 local exchange's currency.

Office Depot Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Gross_Profit 4,6474,5034,0063,3923,3573,4263,2482,6263,7763,502

Office Depot Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
Gross_Profit 883987891937814936814856747726
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