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GuruFocus has detected 6 Warning Signs with Bon-Ton Stores Inc $BONT.
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Bon-Ton Stores Inc (NAS:BONT)
Gross Profit
$997 Mil (TTM As of Jan. 2017)

Bon-Ton Stores Inc's gross profit for the three months ended in Jan. 2017 was $340 Mil. Bon-Ton Stores Inc's gross profit for the trailing twelve months (TTM) ended in Jan. 2017 was $997 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Bon-Ton Stores Inc's gross profit for the three months ended in Jan. 2017 was $340 Mil. Bon-Ton Stores Inc's revenue for the three months ended in Jan. 2017 was $900 Mil. Therefore, Bon-Ton Stores Inc's Gross Margin for the quarter that ended in Jan. 2017 was 37.82%.

Bon-Ton Stores Inc had a gross margin of 37.82% for the quarter that ended in Jan. 2017 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Bon-Ton Stores Inc was 38.94%. The lowest was 36.34%. And the median was 37.36%.


Definition

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

Bon-Ton Stores Inc's Gross Profit for the fiscal year that ended in Jan. 2017 is calculated as

Gross Profit (A: Jan. 2017 )=Revenue - Cost of Goods Sold
=2674.351 - 1677.726
=997

Bon-Ton Stores Inc's Gross Profit for the quarter that ended in Jan. 2017 is calculated as

Gross Profit (Q: Jan. 2017 )=Revenue - Cost of Goods Sold
=900.041 - 559.648
=340

Bon-Ton Stores Inc Gross Profit for the trailing twelve months (TTM) ended in Jan. 2017 was 217.51 (Apr. 2016 ) + 214.339 (Jul. 2016 ) + 224.383 (Oct. 2016 ) + 340.393 (Jan. 2017 ) = $997 Mil.

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

Bon-Ton Stores Inc's Gross Margin for the quarter that ended in Jan. 2017 is calculated as

Gross Margin (Q: Jan. 2017 )=Gross Profit (Q: Jan. 2017 ) / Revenue (Q: Jan. 2017 )
=(Revenue - Cost of Goods Sold) / Revenue
=340 / 900.041
=37.82 %

* 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

Bon-Ton Stores Inc had a gross margin of 37.82% for the quarter that ended in Jan. 2017 => 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 local exchange's currency.

Bon-Ton Stores Inc Annual Data

Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16Jan17
Gross_Profit 1,3181,1901,1731,1861,1061,1051,0651,0501,014997

Bon-Ton Stores Inc Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
Gross_Profit 249350223220226345218214224340
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