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Conn's Inc (NAS:CONN)
Gross Profit
$765 Mil (TTM As of Oct. 2015)

Conn's Inc's gross profit for the three months ended in Oct. 2015 was $192 Mil. Conn's Inc's gross profit for the trailing twelve months (TTM) ended in Oct. 2015 was $765 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. 2015 was $192 Mil. Conn's Inc's revenue for the three months ended in Oct. 2015 was $395 Mil. Therefore, Conn's Inc's Gross Margin for the quarter that ended in Oct. 2015 was 48.66%.

Conn's Inc had a gross margin of 48.66% for the quarter that ended in Oct. 2015 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Conn's Inc was 47.68%. The lowest was 33.76%. And the median was 39.08%.


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. 2015 is calculated as

Gross Profit (A: Jan. 2015 )=Revenue - Cost of Goods Sold
=1485.218 - 777.046
=708

Conn's Inc's Gross Profit for the quarter that ended in Oct. 2015 is calculated as

Gross Profit (Q: Oct. 2015 )=Revenue - Cost of Goods Sold
=395.233 - 202.901
=192

Conn's Inc Gross Profit for the trailing twelve months (TTM) ended in Oct. 2015 was 201.535 (Jan. 2015 ) + 177.943 (Apr. 2015 ) + 193.589 (Jul. 2015 ) + 192.332 (Oct. 2015 ) = $765 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. 2015 is calculated as

Gross Margin (Q: Oct. 2015 )=Gross Profit (Q: Oct. 2015 ) / Revenue (Q: Oct. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=192 / 395.233
=48.66 %

* 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 48.66% for the quarter that ended in Oct. 2015 => 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

Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15
Gross_Profit 248288307301329326330404564708

Conn's Inc Quarterly Data

Jul13Oct13Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15
Gross_Profit 133158146161182176202178194192
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