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Pep Boys - Manny Moe & Jack (NYSE:PBY)
Gross Profit
$476 Mil (TTM As of Apr. 2015)

Pep Boys - Manny Moe & Jack's gross profit for the three months ended in Apr. 2015 was $134 Mil. Pep Boys - Manny Moe & Jack's gross profit for the trailing twelve months (TTM) ended in Apr. 2015 was $476 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 Apr. 2015 was $134 Mil. Pep Boys - Manny Moe & Jack's revenue for the three months ended in Apr. 2015 was $542 Mil. Therefore, Pep Boys - Manny Moe & Jack's Gross Margin for the quarter that ended in Apr. 2015 was 24.67%.

Pep Boys - Manny Moe & Jack had a gross margin of 24.67% for the quarter that ended in Apr. 2015 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Pep Boys - Manny Moe & Jack was 32.99%. The lowest was 21.99%. And the median was 25.86%.

Warning Sign:

Pep Boys - Manny Moe & Jack gross margin has been in long term decline. The average rate of decline per year is -2.6%.


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 Apr. 2015 is calculated as

Gross Profit (Q: Apr. 2015 )=Revenue - Cost of Goods Sold
=542.261 - 408.494
=134

Pep Boys - Manny Moe & Jack Gross Profit for the trailing twelve months (TTM) ended in Apr. 2015 was 124.297 (Jul. 2014 ) + 118.334 (Oct. 2014 ) + 99.684 (Jan. 2015 ) + 133.767 (Apr. 2015 ) = $476 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 Apr. 2015 is calculated as

Gross Margin (Q: Apr. 2015 )=Gross Profit (Q: Apr. 2015 ) / Revenue (Q: Apr. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=134 / 542.261
=24.67 %

* 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 24.67% for the quarter that ended in Apr. 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

Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15
Gross_Profit 117122139123104133124118100134
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