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Smith & Wesson Holding Corp (NAS:SWHC)
Gross Profit
$212.4 Mil (TTM As of Oct. 2014)

Smith & Wesson Holding Corp's gross profit for the three months ended in Oct. 2014 was $34.8 Mil. Smith & Wesson Holding Corp's gross profit for the trailing twelve months (TTM) ended in Oct. 2014 was $212.4 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. 2014 was $34.8 Mil. Smith & Wesson Holding Corp's revenue for the three months ended in Oct. 2014 was $108.4 Mil. Therefore, Smith & Wesson Holding Corp's Gross Margin for the quarter that ended in Oct. 2014 was 32.13%.

Smith & Wesson Holding Corp had a gross margin of 32.13% for the quarter that ended in Oct. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Smith & Wesson Holding Corp was 61.54%. The lowest was 24.58%. And the median was 31.75%.


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. 2014 is calculated as

Gross Profit (A: Apr. 2014 )=Revenue - Cost of Goods Sold
=626.62 - 367.515
=259.1

Smith & Wesson Holding Corp's Gross Profit for the quarter that ended in Oct. 2014 is calculated as

Gross Profit (Q: Oct. 2014 )=Revenue - Cost of Goods Sold
=108.446 - 73.606
=34.8

Smith & Wesson Holding Corp Gross Profit for the trailing twelve months (TTM) ended in Oct. 2014 was 58.651 (Jan. 2014 ) + 69.744 (Apr. 2014 ) + 49.118 (Jul. 2014 ) + 34.84 (Oct. 2014 ) = $212.4 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. 2014 is calculated as

Gross Margin (Q: Oct. 2014 )=Gross Profit (Q: Oct. 2014 ) / Revenue (Q: Oct. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=34.8 / 108.446
=32.13 %

* 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

Smith & Wesson Holding Corp had a gross margin of 32.13% for the quarter that ended in Oct. 2014 => 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.

Smith & Wesson Holding Corp Annual Data

Apr05Apr06Apr07Apr08Apr09Apr10Apr11Apr12Apr13Apr14
Gross_Profit 40.949.676.392.497.1131.4104.7128.0218.1259.1

Smith & Wesson Holding Corp Quarterly Data

Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14
Gross_Profit 51.248.549.968.472.857.958.769.749.134.8
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