Switch to:
GuruFocus has detected 6 Warning Signs with Conn's Inc \$CONN.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Conn's Inc (NAS:CONN)
Gross Profit
\$774 Mil (TTM As of Jan. 2017)

Conn's Inc's gross profit for the three months ended in Jan. 2017 was \$215 Mil. Conn's Inc's gross profit for the trailing twelve months (TTM) ended in Jan. 2017 was \$774 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Conn's Inc's gross profit for the three months ended in Jan. 2017 was \$215 Mil. Conn's Inc's revenue for the three months ended in Jan. 2017 was \$433 Mil. Therefore, Conn's Inc's Gross Margin for the quarter that ended in Jan. 2017 was 49.78%.

Conn's Inc had a gross margin of 49.78% for the quarter that ended in Jan. 2017 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Conn's Inc was 50.24%. The lowest was 34.90%. And the median was 43.77%.

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. 2017 is calculated as

 Gross Profit (A: Jan. 2017 ) = Revenue - Cost of Goods Sold = 1596.848 - 823.082 = 774

Conn's 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 = 432.805 - 217.373 = 215

Conn's Inc Gross Profit for the trailing twelve months (TTM) ended in Jan. 2017 was 184.647 (Apr. 2016 ) + 189.288 (Jul. 2016 ) + 184.399 (Oct. 2016 ) + 215.432 (Jan. 2017 ) = \$774 Mil.

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

Conn's 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 = 215 / 432.805 = 49.78 %

* 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

Conn's Inc had a gross margin of 49.78% for the quarter that ended in Jan. 2017 => Durable competitive advantage

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Conn's Inc Annual Data

 Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Jan14 Jan15 Jan16 Jan17 Gross_Profit 307 368 292 299 323 404 600 708 780 774

Conn's Inc Quarterly Data

 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Gross_Profit 190 202 178 194 192 216 185 189 184 215
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to \$400 per referral. ( Learn More)