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Family Dollar Stores Inc (NYSE:FDO)
Gross Profit
\$3,588 Mil (TTM As of May. 2015)

Family Dollar Stores Inc's gross profit for the three months ended in May. 2015 was \$943 Mil. Family Dollar Stores Inc's gross profit for the trailing twelve months (TTM) ended in May. 2015 was \$3,588 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Family Dollar Stores Inc's gross profit for the three months ended in May. 2015 was \$943 Mil. Family Dollar Stores Inc's revenue for the three months ended in May. 2015 was \$2,728 Mil. Therefore, Family Dollar Stores Inc's Gross Margin for the quarter that ended in May. 2015 was 34.57%.

Family Dollar Stores Inc had a gross margin of 34.57% for the quarter that ended in May. 2015 => Competition eroding margins

Definition

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

Family Dollar Stores Inc's Gross Profit for the fiscal year that ended in Aug. 2014 is calculated as

 Gross Profit (A: Aug. 2014 ) = Revenue - Cost of Goods Sold = 10489.33 - 6958.045 = 3,531

Family Dollar Stores Inc's Gross Profit for the quarter that ended in May. 2015 is calculated as

 Gross Profit (Q: May. 2015 ) = Revenue - Cost of Goods Sold = 2728.176 - 1785.011 = 943

Family Dollar Stores Inc Gross Profit for the trailing twelve months (TTM) ended in May. 2015 was 861.297 (Aug. 2014 ) + 852.947 (Nov. 2014 ) + 931.087 (Feb. 2015 ) + 943.165 (May. 2015 ) = \$3,588 Mil.

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

Family Dollar Stores Inc's Gross Margin for the quarter that ended in May. 2015 is calculated as

 Gross Margin (Q: May. 2015 ) = Gross Profit (Q: May. 2015 ) / Revenue (Q: May. 2015 ) = (Revenue - Cost of Goods Sold) / Revenue = 943 / 2728.176 = 34.57 %

* 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

Family Dollar Stores Inc had a gross margin of 34.57% for the quarter that ended in May. 2015 => Competition eroding margins

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Family Dollar Stores Inc Annual Data

 Aug05 Aug06 Aug07 Aug08 Aug09 Aug10 Aug11 Aug12 Aug13 Aug14 Gross_Profit 1,916 2,118 2,322 2,346 2,578 2,808 3,032 3,260 3,555 3,531

Family Dollar Stores Inc Quarterly Data

 Feb13 May13 Aug13 Nov13 Feb14 May14 Aug14 Nov14 Feb15 May15 Gross_Profit 967 892 868 857 902 911 861 853 931 943
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