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Family Dollar Stores, Inc. (NYSE:FDO)
Gross Profit
$3,520 Mil (TTM As of Feb. 2014)

Family Dollar Stores, Inc.'s gross profit for the three months ended in Feb. 2014 was $902 Mil. Family Dollar Stores, Inc.'s gross profit for the trailing twelve months (TTM) ended in Feb. 2014 was $3,520 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 Feb. 2014 was $902 Mil. Family Dollar Stores, Inc.'s revenue for the three months ended in Feb. 2014 was $2,717 Mil. Therefore, Family Dollar Stores, Inc.'s Gross Margin for the quarter that ended in Feb. 2014 was 33.21%.

Family Dollar Stores, Inc. had a gross margin of 33.21% for the quarter that ended in Feb. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Family Dollar Stores, Inc. was 35.69%. The lowest was 32.90%. And the median was 34.00%.


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. 2013 is calculated as

Gross Profit (A: Aug. 2013 )=Revenue - Cost of Goods Sold
=10391.457 - 6836.712
=3,555

Family Dollar Stores, Inc.'s Gross Profit for the quarter that ended in Feb. 2014 is calculated as

Gross Profit (Q: Feb. 2014 )=Revenue - Cost of Goods Sold
=2716.621 - 1814.327
=902

Family Dollar Stores, Inc. Gross Profit for the trailing twelve months (TTM) ended in Feb. 2014 was 892.458 (May. 2013 ) + 868.443 (Aug. 2013 ) + 856.841 (Nov. 2013 ) + 902.294 (Feb. 2014 ) = $3,520 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 Feb. 2014 is calculated as

Gross Margin (Q: Feb. 2014 )=Gross Profit (Q: Feb. 2014 ) / Revenue (Q: Feb. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=902 / 2716.621
=33.21 %

* 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 33.21% for the quarter that ended in Feb. 2014 => 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.

Family Dollar Stores, Inc. Annual Data

Aug04Aug05Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13
Gross_Profit 1,7861,9162,1182,3222,3462,5782,8083,0323,2603,555

Family Dollar Stores, Inc. Quarterly Data

Nov11Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14
Gross_Profit 758857845800827967892868857902
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