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Pep Boys - Manny Moe & Jack (NYSE:PBY)
Gross Profit
\$479 Mil (TTM As of Oct. 2015)

Pep Boys - Manny Moe & Jack's gross profit for the three months ended in Oct. 2015 was \$118 Mil. Pep Boys - Manny Moe & Jack's gross profit for the trailing twelve months (TTM) ended in Oct. 2015 was \$479 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Pep Boys - Manny Moe & Jack's gross profit for the three months ended in Oct. 2015 was \$118 Mil. Pep Boys - Manny Moe & Jack's revenue for the three months ended in Oct. 2015 was \$508 Mil. Therefore, Pep Boys - Manny Moe & Jack's Gross Margin for the quarter that ended in Oct. 2015 was 23.18%.

Pep Boys - Manny Moe & Jack had a gross margin of 23.18% for the quarter that ended in Oct. 2015 => Competition eroding margins

Definition

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

Pep Boys - Manny Moe & Jack's Gross Profit for the fiscal year that ended in Jan. 2015 is calculated as

 Gross Profit (A: Jan. 2015 ) = Revenue - Cost of Goods Sold = 2084.603 - 1609.159 = 475

Pep Boys - Manny Moe & Jack's Gross Profit for the quarter that ended in Oct. 2015 is calculated as

 Gross Profit (Q: Oct. 2015 ) = Revenue - Cost of Goods Sold = 508.136 - 390.339 = 118

Pep Boys - Manny Moe & Jack Gross Profit for the trailing twelve months (TTM) ended in Oct. 2015 was 99.684 (Jan. 2015 ) + 133.767 (Apr. 2015 ) + 127.572 (Jul. 2015 ) + 117.797 (Oct. 2015 ) = \$479 Mil.

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

Pep Boys - Manny Moe & Jack's Gross Margin for the quarter that ended in Oct. 2015 is calculated as

 Gross Margin (Q: Oct. 2015 ) = Gross Profit (Q: Oct. 2015 ) / Revenue (Q: Oct. 2015 ) = (Revenue - Cost of Goods Sold) / Revenue = 118 / 508.136 = 23.18 %

* 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

Pep Boys - Manny Moe & Jack had a gross margin of 23.18% for the quarter that ended in Oct. 2015 => 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.

Pep Boys - Manny Moe & Jack Annual Data

 Jan06 Jan07 Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Jan14 Jan15 Gross_Profit 502 566 486 465 486 522 510 492 487 475

Pep Boys - Manny Moe & Jack Quarterly Data

 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Gross_Profit 139 123 104 133 124 118 100 134 128 118
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