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AutoZone Inc (NYSE:AZO)
Gross Profit
$5,474 Mil (TTM As of Feb. 2016)

AutoZone Inc's gross profit for the three months ended in Feb. 2016 was $1,191 Mil. AutoZone Inc's gross profit for the trailing twelve months (TTM) ended in Feb. 2016 was $5,474 Mil.

Gross Margin is calculated as gross profit divided by its revenue. AutoZone Inc's gross profit for the three months ended in Feb. 2016 was $1,191 Mil. AutoZone Inc's revenue for the three months ended in Feb. 2016 was $2,257 Mil. Therefore, AutoZone Inc's Gross Margin for the quarter that ended in Feb. 2016 was 52.75%.

AutoZone Inc had a gross margin of 52.75% for the quarter that ended in Feb. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of AutoZone Inc was 52.29%. The lowest was 49.40%. And the median was 50.72%.


Definition

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

AutoZone Inc's Gross Profit for the fiscal year that ended in Aug. 2015 is calculated as

Gross Profit (A: Aug. 2015 )=Revenue - Cost of Goods Sold
=10187.34 - 4860.309
=5,327

AutoZone Inc's Gross Profit for the quarter that ended in Feb. 2016 is calculated as

Gross Profit (Q: Feb. 2016 )=Revenue - Cost of Goods Sold
=2257.192 - 1066.596
=1,191

AutoZone Inc Gross Profit for the trailing twelve months (TTM) ended in Feb. 2016 was 1302.789 (May. 2015 ) + 1727.548 (Aug. 2015 ) + 1252.934 (Nov. 2015 ) + 1190.596 (Feb. 2016 ) = $5,474 Mil.

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

AutoZone Inc's Gross Margin for the quarter that ended in Feb. 2016 is calculated as

Gross Margin (Q: Feb. 2016 )=Gross Profit (Q: Feb. 2016 ) / Revenue (Q: Feb. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=1,191 / 2257.192
=52.75 %

* 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

AutoZone Inc had a gross margin of 52.75% for the quarter that ended in Feb. 2016 => 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.

AutoZone Inc Annual Data

Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14Aug15
Gross_Profit 2,9393,0643,2683,4163,7124,1194,4324,7414,9355,327

AutoZone Inc Quarterly Data

Nov13Feb14May14Aug14Nov14Feb15May15Aug15Nov15Feb16
Gross_Profit 1,0861,0371,2171,5951,1771,1201,3031,7281,2531,191
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