Switch to:
GuruFocus has detected 1 Warning Sign with AutoZone Inc $AZO.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
AutoZone Inc (NYSE:AZO)
Gross Profit
$5,657 Mil (TTM As of Nov. 2016)

AutoZone Inc's gross profit for the three months ended in Nov. 2016 was $1,302 Mil. AutoZone Inc's gross profit for the trailing twelve months (TTM) ended in Nov. 2016 was $5,657 Mil.

Gross Margin is calculated as gross profit divided by its revenue. AutoZone Inc's gross profit for the three months ended in Nov. 2016 was $1,302 Mil. AutoZone Inc's revenue for the three months ended in Nov. 2016 was $2,468 Mil. Therefore, AutoZone Inc's Gross Margin for the quarter that ended in Nov. 2016 was 52.74%.

AutoZone Inc had a gross margin of 52.74% for the quarter that ended in Nov. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of AutoZone Inc was 52.79%. The lowest was 49.67%. And the median was 51.27%.


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. 2016 is calculated as

Gross Profit (A: Aug. 2016 )=Revenue - Cost of Goods Sold
=10635.676 - 5026.94
=5,609

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

Gross Profit (Q: Nov. 2016 )=Revenue - Cost of Goods Sold
=2467.845 - 1166.303
=1,302

AutoZone Inc Gross Profit for the trailing twelve months (TTM) ended in Nov. 2016 was 1190.596 (Feb. 2016 ) + 1370.458 (May. 2016 ) + 1794.748 (Aug. 2016 ) + 1301.542 (Nov. 2016 ) = $5,657 Mil.

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

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

Gross Margin (Q: Nov. 2016 )=Gross Profit (Q: Nov. 2016 ) / Revenue (Q: Nov. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=1,302 / 2467.845
=52.74 %

* 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

AutoZone Inc had a gross margin of 52.74% for the quarter that ended in Nov. 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 local exchange's currency.

AutoZone Inc Annual Data

Aug07Aug08Aug09Aug10Aug11Aug12Aug13Aug14Aug15Aug16
Gross_Profit 3,0643,2683,4163,7124,1194,4324,7414,9355,3275,609

AutoZone Inc Quarterly Data

Aug14Nov14Feb15May15Aug15Nov15Feb16May16Aug16Nov16
Gross_Profit 1,5951,1771,1201,3031,7281,2531,1911,3701,7951,302
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK