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Ralph Lauren Corp (NYSE:RL)
Gross Profit
\$3,957 Mil (TTM As of Sep. 2016)

Ralph Lauren Corp's gross profit for the three months ended in Sep. 2016 was \$954 Mil. Ralph Lauren Corp's gross profit for the trailing twelve months (TTM) ended in Sep. 2016 was \$3,957 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Ralph Lauren Corp's gross profit for the three months ended in Sep. 2016 was \$954 Mil. Ralph Lauren Corp's revenue for the three months ended in Sep. 2016 was \$1,821 Mil. Therefore, Ralph Lauren Corp's Gross Margin for the quarter that ended in Sep. 2016 was 52.39%.

Ralph Lauren Corp had a gross margin of 52.39% for the quarter that ended in Sep. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Ralph Lauren Corp was 59.84%. The lowest was 54.06%. And the median was 57.65%.

Definition

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

Ralph Lauren Corp's Gross Profit for the fiscal year that ended in Mar. 2016 is calculated as

 Gross Profit (A: Mar. 2016 ) = Revenue - Cost of Goods Sold = 7405 - 3218 = 4,187

Ralph Lauren Corp's Gross Profit for the quarter that ended in Sep. 2016 is calculated as

 Gross Profit (Q: Sep. 2016 ) = Revenue - Cost of Goods Sold = 1821 - 867 = 954

Ralph Lauren Corp Gross Profit for the trailing twelve months (TTM) ended in Sep. 2016 was 1094 (Dec. 2015 ) + 1014 (Mar. 2016 ) + 895 (Jun. 2016 ) + 954 (Sep. 2016 ) = \$3,957 Mil.

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

Ralph Lauren Corp'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 = 954 / 1821 = 52.39 %

* 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

Ralph Lauren Corp had a gross margin of 52.39% for the quarter that ended in Sep. 2016 => Durable competitive advantage

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.

Ralph Lauren Corp Annual Data

 Mar07 Mar08 Mar09 Mar10 Mar11 Mar12 Mar13 Mar14 Mar15 Mar16 Gross_Profit 2,336 2,638 2,731 2,899 3,318 3,998 4,156 4,310 4,378 4,187

Ralph Lauren Corp Quarterly Data

 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Gross_Profit 1,043 1,132 1,159 1,044 966 1,113 1,094 1,014 895 954
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