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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 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

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

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.

Pep Boys - Manny Moe & Jack Annual Data

Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15
Gross_Profit 502566486465486522510492487475

Pep Boys - Manny Moe & Jack Quarterly Data

Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15
Gross_Profit 139123104133124118100134128118
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