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Dean Foods Co (NYSE:DF)
Gross Profit
$1,832 Mil (TTM As of Jun. 2015)

Dean Foods Co's gross profit for the three months ended in Jun. 2015 was $496 Mil. Dean Foods Co's gross profit for the trailing twelve months (TTM) ended in Jun. 2015 was $1,832 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Dean Foods Co's gross profit for the three months ended in Jun. 2015 was $496 Mil. Dean Foods Co's revenue for the three months ended in Jun. 2015 was $2,015 Mil. Therefore, Dean Foods Co's Gross Margin for the quarter that ended in Jun. 2015 was 24.60%.

Dean Foods Co had a gross margin of 24.60% for the quarter that ended in Jun. 2015 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Dean Foods Co was 27.94%. The lowest was 17.61%. And the median was 24.24%.

Warning Sign:

Dean Foods Co gross margin has been in long term decline. The average rate of decline per year is -8%.


Definition

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

Dean Foods Co's Gross Profit for the fiscal year that ended in Mar. 2014 is calculated as

Gross Profit (A: Mar. 2014 )=Revenue - Cost of Goods Sold
=9064.931 - 7289.401
=1,776

Dean Foods Co's Gross Profit for the quarter that ended in Jun. 2015 is calculated as

Gross Profit (Q: Jun. 2015 )=Revenue - Cost of Goods Sold
=2014.706 - 1519.065
=496

Dean Foods Co Gross Profit for the trailing twelve months (TTM) ended in Jun. 2015 was 416.8 (Sep. 2014 ) + 441.4 (Dec. 2014 ) + 478.309 (Mar. 2015 ) + 495.641 (Jun. 2015 ) = $1,832 Mil.

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

Dean Foods Co's Gross Margin for the quarter that ended in Jun. 2015 is calculated as

Gross Margin (Q: Jun. 2015 )=Gross Profit (Q: Jun. 2015 ) / Revenue (Q: Jun. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=496 / 2014.706
=24.60 %

* 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

Dean Foods Co had a gross margin of 24.60% for the quarter that ended in Jun. 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.

Dean Foods Co Annual Data

Mar05Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14
Gross_Profit 2,6102,6292,7762,7393,0153,1083,0083,0552,8901,776

Dean Foods Co Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
Gross_Profit 495472441446416399417441478496
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