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Campbell Soup Co (NYSE:CPB)
Gross Profit
$2,904 Mil (TTM As of Oct. 2014)

Campbell Soup Co's gross profit for the three months ended in Oct. 2014 was $783 Mil. Campbell Soup Co's gross profit for the trailing twelve months (TTM) ended in Oct. 2014 was $2,904 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Campbell Soup Co's gross profit for the three months ended in Oct. 2014 was $783 Mil. Campbell Soup Co's revenue for the three months ended in Oct. 2014 was $2,255 Mil. Therefore, Campbell Soup Co's Gross Margin for the quarter that ended in Oct. 2014 was 34.72%.

Campbell Soup Co had a gross margin of 34.72% for the quarter that ended in Oct. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Campbell Soup Co was 54.82%. The lowest was 35.05%. And the median was 41.49%.

Warning Sign:

Campbell Soup Co 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.

Campbell Soup Co's Gross Profit for the fiscal year that ended in Jul. 2014 is calculated as

Gross Profit (A: Jul. 2014 )=Revenue - Cost of Goods Sold
=8268 - 5370
=2,898

Campbell Soup Co's Gross Profit for the quarter that ended in Oct. 2014 is calculated as

Gross Profit (Q: Oct. 2014 )=Revenue - Cost of Goods Sold
=2255 - 1472
=783

Campbell Soup Co Gross Profit for the trailing twelve months (TTM) ended in Oct. 2014 was 814 (Jan. 2014 ) + 676 (Apr. 2014 ) + 631 (Jul. 2014 ) + 783 (Oct. 2014 ) = $2,904 Mil.

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

Campbell Soup Co'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
=783 / 2255
=34.72 %

* 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

Campbell Soup Co had a gross margin of 34.72% for the quarter that ended in Oct. 2014 => 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.

Campbell Soup Co Annual Data

Jul05Jul06Jul07Jul08Jul09Jul10Jul11Jul12Jul13Jul14
Gross_Profit 2,8973,0753,0013,1713,0283,1503,1032,8102,9122,898

Campbell Soup Co Quarterly Data

Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14
Gross_Profit 439821762706623777814676631783
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