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Big Lots Inc (NYSE:BIG)
Gross Profit
$2,032 Mil (TTM As of Jul. 2014)

Big Lots Inc's gross profit for the three months ended in Jul. 2014 was $470 Mil. Big Lots Inc's gross profit for the trailing twelve months (TTM) ended in Jul. 2014 was $2,032 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Big Lots Inc's gross profit for the three months ended in Jul. 2014 was $470 Mil. Big Lots Inc's revenue for the three months ended in Jul. 2014 was $1,195 Mil. Therefore, Big Lots Inc's Gross Margin for the quarter that ended in Jul. 2014 was 39.28%.

Big Lots Inc had a gross margin of 39.28% for the quarter that ended in Jul. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Big Lots Inc was 45.12%. The lowest was 38.95%. And the median was 40.65%.


Definition

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

Big Lots Inc'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
=5301.912 - 3236.606
=2,065

Big Lots Inc's Gross Profit for the quarter that ended in Jul. 2014 is calculated as

Gross Profit (Q: Jul. 2014 )=Revenue - Cost of Goods Sold
=1195.363 - 725.836
=470

Big Lots Inc Gross Profit for the trailing twelve months (TTM) ended in Jul. 2014 was 443.459 (Oct. 2013 ) + 625.763 (Jan. 2014 ) + 493.556 (Apr. 2014 ) + 469.527 (Jul. 2014 ) = $2,032 Mil.

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

Big Lots Inc'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
=470 / 1195.363
=39.28 %

* 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

Big Lots Inc had a gross margin of 39.28% 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.

Big Lots Inc Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
Gross_Profit 1,6871,7321,8911,8401,8571,9192,0122,0702,1122,065

Big Lots Inc Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
Gross_Profit 512478433689502464443626494470
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