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Smith & Wesson Holding Corp (NAS:SWHC)
Gross Profit
\$363.9 Mil (TTM As of Oct. 2016)

Smith & Wesson Holding Corp's gross profit for the three months ended in Oct. 2016 was \$97.6 Mil. Smith & Wesson Holding Corp's gross profit for the trailing twelve months (TTM) ended in Oct. 2016 was \$363.9 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Smith & Wesson Holding Corp's gross profit for the three months ended in Oct. 2016 was \$97.6 Mil. Smith & Wesson Holding Corp's revenue for the three months ended in Oct. 2016 was \$233.5 Mil. Therefore, Smith & Wesson Holding Corp's Gross Margin for the quarter that ended in Oct. 2016 was 41.80%.

Smith & Wesson Holding Corp had a gross margin of 41.80% for the quarter that ended in Oct. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Smith & Wesson Holding Corp was 41.71%. The lowest was 29.00%. And the median was 32.31%.

Definition

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

Smith & Wesson Holding Corp's Gross Profit for the fiscal year that ended in Apr. 2016 is calculated as

 Gross Profit (A: Apr. 2016 ) = Revenue - Cost of Goods Sold = 722.908 - 429.096 = 293.8

Smith & Wesson Holding Corp's Gross Profit for the quarter that ended in Oct. 2016 is calculated as

 Gross Profit (Q: Oct. 2016 ) = Revenue - Cost of Goods Sold = 233.528 - 135.923 = 97.6

Smith & Wesson Holding Corp Gross Profit for the trailing twelve months (TTM) ended in Oct. 2016 was 86.658 (Jan. 2016 ) + 92.069 (Apr. 2016 ) + 87.569 (Jul. 2016 ) + 97.605 (Oct. 2016 ) = \$363.9 Mil.

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

Smith & Wesson Holding Corp's Gross Margin for the quarter that ended in Oct. 2016 is calculated as

 Gross Margin (Q: Oct. 2016 ) = Gross Profit (Q: Oct. 2016 ) / Revenue (Q: Oct. 2016 ) = (Revenue - Cost of Goods Sold) / Revenue = 97.6 / 233.528 = 41.80 %

* 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

Smith & Wesson Holding Corp had a gross margin of 41.80% for the quarter that ended in Oct. 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.

Smith & Wesson Holding Corp Annual Data

 Apr07 Apr08 Apr09 Apr10 Apr11 Apr12 Apr13 Apr14 Apr15 Apr16 Gross_Profit 76.3 92.4 97.1 131.4 104.7 127.9 218.1 259.1 194.9 293.8

Smith & Wesson Holding Corp Quarterly Data

 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Gross_Profit 49.1 34.8 43.8 67.1 58.9 56.2 86.7 92.1 87.6 97.6
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