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TJX Companies (NYSE:TJX)
Gross Profit
$8,000 Mil (TTM As of Jul. 2014)

TJX Companies's gross profit for the three months ended in Jul. 2014 was $1,981 Mil. TJX Companies's gross profit for the trailing twelve months (TTM) ended in Jul. 2014 was $8,000 Mil.

Gross Margin is calculated as gross profit divided by its revenue. TJX Companies's gross profit for the three months ended in Jul. 2014 was $1,981 Mil. TJX Companies's revenue for the three months ended in Jul. 2014 was $6,917 Mil. Therefore, TJX Companies's Gross Margin for the quarter that ended in Jul. 2014 was 28.64%.

TJX Companies had a gross margin of 28.64% for the quarter that ended in Jul. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of TJX Companies was 28.51%. The lowest was 22.92%. And the median was 24.69%.


Definition

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

TJX Companies's Gross Profit for the fiscal year that ended in Jan. 2014 is calculated as

Gross Profit (A: Jan. 2014 )=Revenue - Cost of Goods Sold
=27422.696 - 19605.037
=7,818

TJX Companies's Gross Profit for the quarter that ended in Jul. 2014 is calculated as

Gross Profit (Q: Jul. 2014 )=Revenue - Cost of Goods Sold
=6917.212 - 4935.856
=1,981

TJX Companies Gross Profit for the trailing twelve months (TTM) ended in Jul. 2014 was 2047.411 (Oct. 2013 ) + 2158.487 (Jan. 2014 ) + 1813.176 (Apr. 2014 ) + 1981.356 (Jul. 2014 ) = $8,000 Mil.

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

TJX Companies's Gross Margin for the quarter that ended in Jul. 2014 is calculated as

Gross Margin (Q: Jul. 2014 )=Gross Profit (Q: Jul. 2014 ) / Revenue (Q: Jul. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=1,981 / 6917.212
=28.64 %

* 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

TJX Companies had a gross margin of 28.64% for the quarter that ended in Jul. 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.

TJX Companies Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
Gross_Profit 3,5033,7414,1344,4954,5705,3205,9026,3377,3577,818

TJX Companies Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
Gross_Profit 1,6321,6701,8452,2091,7561,8562,0472,1581,8131,981
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