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Ralph Lauren Corp (NYSE:RL)
Gross Profit
$4,235 Mil (TTM As of Dec. 2013)

Ralph Lauren Corp's gross profit for the three months ended in Dec. 2013 was $1,172 Mil. Ralph Lauren Corp's gross profit for the trailing twelve months (TTM) ended in Dec. 2013 was $4,235 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Ralph Lauren Corp's gross profit for the three months ended in Dec. 2013 was $1,172 Mil. Ralph Lauren Corp's revenue for the three months ended in Dec. 2013 was $2,015 Mil. Therefore, Ralph Lauren Corp's Gross Margin for the quarter that ended in Dec. 2013 was 58.16%.

Ralph Lauren Corp had a gross margin of 58.16% for the quarter that ended in Dec. 2013 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Ralph Lauren Corp was 59.84%. The lowest was 45.93%. And the median was 50.96%.


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. 2013 is calculated as

Gross Profit (A: Mar. 2013 )=Revenue - Cost of Goods Sold
=6944.8 - 2789
=4,156

Ralph Lauren Corp's Gross Profit for the quarter that ended in Dec. 2013 is calculated as

Gross Profit (Q: Dec. 2013 )=Revenue - Cost of Goods Sold
=2015 - 843
=1,172

Ralph Lauren Corp Gross Profit for the trailing twelve months (TTM) ended in Dec. 2013 was 974.8 (Mar. 2013 ) + 1004 (Jun. 2013 ) + 1084 (Sep. 2013 ) + 1172 (Dec. 2013 ) = $4,235 Mil.

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

Ralph Lauren Corp's Gross Margin for the quarter that ended in Dec. 2013 is calculated as

Gross Margin (Q: Dec. 2013 )=Gross Profit (Q: Dec. 2013 ) / Revenue (Q: Dec. 2013 )
=(Revenue - Cost of Goods Sold) / Revenue
=1,172 / 2015
=58.16 %

* 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

Ralph Lauren Corp had a gross margin of 58.16% for the quarter that ended in Dec. 2013 => Durable competitive advantage


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.

Ralph Lauren Corp Annual Data

Mar04Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13
Gross_Profit 1,3231,6852,0222,3362,6382,7312,8993,3183,9984,156

Ralph Lauren Corp Quarterly Data

Sep11Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13
Gross_Profit 1,0791,0329269921,0951,0949751,0041,0841,172
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