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Conn's Inc (NAS:CONN)
Gross Profit
$728 Mil (TTM As of Oct. 2014)

Conn's Inc's gross profit for the three months ended in Oct. 2014 was $190 Mil. Conn's Inc's gross profit for the trailing twelve months (TTM) ended in Oct. 2014 was $728 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Conn's Inc's gross profit for the three months ended in Oct. 2014 was $190 Mil. Conn's Inc's revenue for the three months ended in Oct. 2014 was $370 Mil. Therefore, Conn's Inc's Gross Margin for the quarter that ended in Oct. 2014 was 51.22%.

Conn's Inc had a gross margin of 51.22% for the quarter that ended in Oct. 2014 => Durable competitive advantage

During the past 12 years, the highest Gross Margin of Conn's Inc was 50.24%. The lowest was 33.76%. And the median was 37.75%.


Definition

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

Conn's 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
=1193.769 - 594.048
=600

Conn's Inc's Gross Profit for the quarter that ended in Oct. 2014 is calculated as

Gross Profit (Q: Oct. 2014 )=Revenue - Cost of Goods Sold
=370.058 - 180.501
=190

Conn's Inc Gross Profit for the trailing twelve months (TTM) ended in Oct. 2014 was 182.587 (Jan. 2014 ) + 173.247 (Apr. 2014 ) + 182.376 (Jul. 2014 ) + 189.557 (Oct. 2014 ) = $728 Mil.

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

Conn's Inc's Gross Margin for the quarter that ended in Oct. 2014 is calculated as

Gross Margin (Q: Oct. 2014 )=Gross Profit (Q: Oct. 2014 ) / Revenue (Q: Oct. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=190 / 370.058
=51.22 %

* 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

Conn's Inc had a gross margin of 51.22% for the quarter that ended in Oct. 2014 => 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 own currency.

Conn's Inc Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
Gross_Profit 207248288307301329326330404600

Conn's Inc Quarterly Data

Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14
Gross_Profit 9599119126133158183173182190
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