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The Estee Lauder Companies Inc (NYSE:EL)
Gross Profit
$8,907 Mil (TTM As of Dec. 2015)

The Estee Lauder Companies Inc's gross profit for the three months ended in Dec. 2015 was $2,536 Mil. The Estee Lauder Companies Inc's gross profit for the trailing twelve months (TTM) ended in Dec. 2015 was $8,907 Mil.

Gross Margin is calculated as gross profit divided by its revenue. The Estee Lauder Companies Inc's gross profit for the three months ended in Dec. 2015 was $2,536 Mil. The Estee Lauder Companies Inc's revenue for the three months ended in Dec. 2015 was $3,125 Mil. Therefore, The Estee Lauder Companies Inc's Gross Margin for the quarter that ended in Dec. 2015 was 81.15%.

The Estee Lauder Companies Inc had a gross margin of 81.15% for the quarter that ended in Dec. 2015 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of The Estee Lauder Companies Inc was 80.51%. The lowest was 73.91%. And the median was 77.27%.


Definition

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

The Estee Lauder Companies Inc's Gross Profit for the fiscal year that ended in Jun. 2015 is calculated as

Gross Profit (A: Jun. 2015 )=Revenue - Cost of Goods Sold
=10780.4 - 2100.6
=8,680

The Estee Lauder Companies Inc's Gross Profit for the quarter that ended in Dec. 2015 is calculated as

Gross Profit (Q: Dec. 2015 )=Revenue - Cost of Goods Sold
=3124.8 - 589
=2,536

The Estee Lauder Companies Inc Gross Profit for the trailing twelve months (TTM) ended in Dec. 2015 was 2077.6 (Mar. 2015 ) + 2036.4 (Jun. 2015 ) + 2257.5 (Sep. 2015 ) + 2535.8 (Dec. 2015 ) = $8,907 Mil.

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

The Estee Lauder Companies Inc's Gross Margin for the quarter that ended in Dec. 2015 is calculated as

Gross Margin (Q: Dec. 2015 )=Gross Profit (Q: Dec. 2015 ) / Revenue (Q: Dec. 2015 )
=(Revenue - Cost of Goods Sold) / Revenue
=2,536 / 3124.8
=81.15 %

* 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

The Estee Lauder Companies Inc had a gross margin of 81.15% for the quarter that ended in Dec. 2015 => 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.

The Estee Lauder Companies Inc Annual Data

Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14Jun15
Gross_Profit 4,7775,2635,9145,4425,9666,8737,7188,1568,8118,680

The Estee Lauder Companies Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
Gross_Profit 2,1312,4372,0512,1922,0942,4712,0782,0362,2582,536
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