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Best Buy Co Inc (NYSE:BBY)
Gross Profit
\$9,270 Mil (TTM As of Jul. 2016)

Best Buy Co Inc's gross profit for the three months ended in Jul. 2016 was \$2,062 Mil. Best Buy Co Inc's gross profit for the trailing twelve months (TTM) ended in Jul. 2016 was \$9,270 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Best Buy Co Inc's gross profit for the three months ended in Jul. 2016 was \$2,062 Mil. Best Buy Co Inc's revenue for the three months ended in Jul. 2016 was \$8,533 Mil. Therefore, Best Buy Co Inc's Gross Margin for the quarter that ended in Jul. 2016 was 24.17%.

Best Buy Co Inc had a gross margin of 24.17% for the quarter that ended in Jul. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Best Buy Co Inc was 25.21%. The lowest was 22.43%. And the median was 24.16%.

Definition

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

Best Buy Co Inc's Gross Profit for the fiscal year that ended in Jan. 2016 is calculated as

 Gross Profit (A: Jan. 2016 ) = Revenue - Cost of Goods Sold = 39528 - 30337 = 9,191

Best Buy Co Inc's Gross Profit for the quarter that ended in Jul. 2016 is calculated as

 Gross Profit (Q: Jul. 2016 ) = Revenue - Cost of Goods Sold = 8533 - 6471 = 2,062

Best Buy Co Inc Gross Profit for the trailing twelve months (TTM) ended in Jul. 2016 was 2112 (Oct. 2015 ) + 2951 (Jan. 2016 ) + 2145 (Apr. 2016 ) + 2062 (Jul. 2016 ) = \$9,270 Mil.

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

Best Buy Co Inc's Gross Margin for the quarter that ended in Jul. 2016 is calculated as

 Gross Margin (Q: Jul. 2016 ) = Gross Profit (Q: Jul. 2016 ) / Revenue (Q: Jul. 2016 ) = (Revenue - Cost of Goods Sold) / Revenue = 2,062 / 8533 = 24.17 %

* 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

Best Buy Co Inc had a gross margin of 24.17% for the quarter that ended in Jul. 2016 => Competition eroding margins

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.

Best Buy Co Inc Annual Data

 Feb07 Feb08 Feb09 Feb10 Feb11 Feb12 Jan13 Jan14 Jan15 Jan16 Gross_Profit 8,769 9,546 10,998 12,042 12,541 10,984 0 9,399 9,047 9,191

Best Buy Co Inc Quarterly Data

 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Gross_Profit 1,978 2,076 3,026 2,030 2,098 2,112 2,951 2,145 2,062 2,203
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