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Dollar Tree Inc (NAS:DLTR)
Gross Profit
$6,120 Mil (TTM As of Jul. 2016)

Dollar Tree Inc's gross profit for the three months ended in Jul. 2016 was $1,512 Mil. Dollar Tree Inc's gross profit for the trailing twelve months (TTM) ended in Jul. 2016 was $6,120 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Dollar Tree Inc's gross profit for the three months ended in Jul. 2016 was $1,512 Mil. Dollar Tree Inc's revenue for the three months ended in Jul. 2016 was $4,996 Mil. Therefore, Dollar Tree Inc's Gross Margin for the quarter that ended in Jul. 2016 was 30.27%.

Dollar Tree Inc had a gross margin of 30.27% for the quarter that ended in Jul. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Dollar Tree Inc was 35.87%. The lowest was 30.01%. And the median was 35.38%.

Warning Sign:

Dollar Tree Inc gross margin has been in long term decline. The average rate of decline per year is -2.5%.


Definition

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

Dollar Tree Inc's Gross Profit for the fiscal year that ended in Jan. 2016 is calculated as

Gross Profit (A: Jan. 2016 )=Revenue - Cost of Goods Sold
=15498.4 - 10841.7
=4,657

Dollar Tree Inc's Gross Profit for the quarter that ended in Jul. 2016 is calculated as

Gross Profit (Q: Jul. 2016 )=Revenue - Cost of Goods Sold
=4996.3 - 3483.9
=1,512

Dollar Tree Inc Gross Profit for the trailing twelve months (TTM) ended in Jul. 2016 was 1400 (Oct. 2015 ) + 1652.6 (Jan. 2016 ) + 1554.6 (Apr. 2016 ) + 1512.4 (Jul. 2016 ) = $6,120 Mil.

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

Dollar Tree Inc's Gross Margin for the quarter that ended in Jul. 2016 is calculated as

Gross Margin (Q: Jul. 2016 )=Gross Profit (Q: Jul. 2016 ) / Revenue (Q: Jul. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=1,512 / 4996.3
=30.27 %

* 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

Dollar Tree Inc had a gross margin of 30.27% for the quarter that ended in Jul. 2016 => 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.

Dollar Tree Inc Annual Data

Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16
Gross_Profit 1,3571,4611,5921,8572,0882,3782,6532,7903,0344,657

Dollar Tree Inc Quarterly Data

Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16
Gross_Profit 6976947259187498551,4001,6531,5551,512
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