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Cal-Maine Foods Inc (NAS:CALM)
Gross Profit
$378 Mil (TTM As of Feb. 2015)

Cal-Maine Foods Inc's gross profit for the three months ended in Feb. 2015 was $113 Mil. Cal-Maine Foods Inc's gross profit for the trailing twelve months (TTM) ended in Feb. 2015 was $378 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Cal-Maine Foods Inc's gross profit for the three months ended in Feb. 2015 was $113 Mil. Cal-Maine Foods Inc's revenue for the three months ended in Feb. 2015 was $438 Mil. Therefore, Cal-Maine Foods Inc's Gross Margin for the quarter that ended in Feb. 2015 was 25.71%.

Cal-Maine Foods Inc had a gross margin of 25.71% for the quarter that ended in Feb. 2015 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Cal-Maine Foods Inc was 32.60%. The lowest was 9.44%. And the median was 19.63%.

Warning Sign:

Cal-Maine Foods Inc gross margin has been in long term decline. The average rate of decline per year is -3%.


Definition

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

Cal-Maine Foods Inc's Gross Profit for the fiscal year that ended in May. 2014 is calculated as

Gross Profit (A: May. 2014 )=Revenue - Cost of Goods Sold
=1440.907 - 1138.143
=303

Cal-Maine Foods Inc's Gross Profit for the quarter that ended in Feb. 2015 is calculated as

Gross Profit (Q: Feb. 2015 )=Revenue - Cost of Goods Sold
=437.556 - 325.039
=113

Cal-Maine Foods Inc Gross Profit for the trailing twelve months (TTM) ended in Feb. 2015 was 91.291 (May. 2014 ) + 81.101 (Aug. 2014 ) + 92.709 (Nov. 2014 ) + 112.517 (Feb. 2015 ) = $378 Mil.

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

Cal-Maine Foods Inc's Gross Margin for the quarter that ended in Feb. 2015 is calculated as

Gross Margin (Q: Feb. 2015 )=Gross Profit (Q: Feb. 2015 ) / Revenue (Q: Feb. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=113 / 437.556
=25.71 %

* 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

Cal-Maine Foods Inc had a gross margin of 25.71% for the quarter that ended in Feb. 2015 => 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.

Cal-Maine Foods Inc Annual Data

May05May06May07May08May09May10May11May12May13May14
Gross_Profit 3562119299205195185202215303

Cal-Maine Foods Inc Quarterly Data

Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15
Gross_Profit 516751457592918193113
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