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Estee Lauder Cos Inc (NYSE:EL)
Gross Profit
$8,774 Mil (TTM As of Sep. 2014)

Estee Lauder Cos Inc's gross profit for the three months ended in Sep. 2014 was $2,094 Mil. Estee Lauder Cos Inc's gross profit for the trailing twelve months (TTM) ended in Sep. 2014 was $8,774 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Estee Lauder Cos Inc's gross profit for the three months ended in Sep. 2014 was $2,094 Mil. Estee Lauder Cos Inc's revenue for the three months ended in Sep. 2014 was $2,631 Mil. Therefore, Estee Lauder Cos Inc's Gross Margin for the quarter that ended in Sep. 2014 was 79.60%.

Estee Lauder Cos Inc had a gross margin of 79.60% for the quarter that ended in Sep. 2014 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Estee Lauder Cos Inc was 80.32%. The lowest was 72.12%. And the median was 75.66%.


Definition

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

Estee Lauder Cos Inc's Gross Profit for the fiscal year that ended in Jun. 2014 is calculated as

Gross Profit (A: Jun. 2014 )=Revenue - Cost of Goods Sold
=10968.8 - 2158.2
=8,811

Estee Lauder Cos Inc's Gross Profit for the quarter that ended in Sep. 2014 is calculated as

Gross Profit (Q: Sep. 2014 )=Revenue - Cost of Goods Sold
=2631 - 536.6
=2,094

Estee Lauder Cos Inc Gross Profit for the trailing twelve months (TTM) ended in Sep. 2014 was 2437.1 (Dec. 2013 ) + 2051.1 (Mar. 2014 ) + 2191.5 (Jun. 2014 ) + 2094.4 (Sep. 2014 ) = $8,774 Mil.

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

Estee Lauder Cos Inc's Gross Margin for the quarter that ended in Sep. 2014 is calculated as

Gross Margin (Q: Sep. 2014 )=Gross Profit (Q: Sep. 2014 ) / Revenue (Q: Sep. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=2,094 / 2631
=79.60 %

* 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

Estee Lauder Cos Inc had a gross margin of 79.60% for the quarter that ended in Sep. 2014 => 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.

Estee Lauder Cos Inc Annual Data

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14
Gross_Profit 4,6774,7775,2635,9145,4425,9666,8737,7188,1568,811

Estee Lauder Cos Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Gross_Profit 1,8102,0102,3651,8491,9322,1312,4372,0512,1922,094
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