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Guess? Inc (NYSE:GES)
Gross Profit
$976 Mil (TTM As of Jan. 2014)

Guess? Inc's gross profit for the three months ended in Jan. 2014 was $302 Mil. Guess? Inc's gross profit for the trailing twelve months (TTM) ended in Jan. 2014 was $976 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Guess? Inc's gross profit for the three months ended in Jan. 2014 was $302 Mil. Guess? Inc's revenue for the three months ended in Jan. 2014 was $768 Mil. Therefore, Guess? Inc's Gross Margin for the quarter that ended in Jan. 2014 was 39.30%.

Guess? Inc had a gross margin of 39.30% for the quarter that ended in Jan. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Guess? Inc was 49.35%. The lowest was 33.91%. And the median was 43.51%.

Warning Sign:

Guess? Inc gross margin has been in long term decline. The average rate of decline per year is -2.9%.


Definition

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

Guess? Inc's Gross Profit for the fiscal year that ended in Jan. 2014 is calculated as

Gross Profit (A: Jan. 2014 )=Revenue - Cost of Goods Sold
=2569.786 - 1593.652
=976

Guess? Inc's Gross Profit for the quarter that ended in Jan. 2014 is calculated as

Gross Profit (Q: Jan. 2014 )=Revenue - Cost of Goods Sold
=768.363 - 466.414
=302

Guess? Inc Gross Profit for the trailing twelve months (TTM) ended in Jan. 2014 was 197.426 (Apr. 2013 ) + 248.532 (Jul. 2013 ) + 228.227 (Oct. 2013 ) + 301.949 (Jan. 2014 ) = $976 Mil.

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

Guess? Inc's Gross Margin for the quarter that ended in Jan. 2014 is calculated as

Gross Margin (Q: Jan. 2014 )=Gross Profit (Q: Jan. 2014 ) / Revenue (Q: Jan. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=302 / 768.363
=39.30 %

* 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

Guess? Inc had a gross margin of 39.30% for the quarter that ended in Jan. 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.

Guess? Inc Annual Data

Dec04Dec05Dec06Jan08Jan09Jan10Jan11Jan12Jan13Jan14
Gross_Profit 2743815197939239411,0821,1561,067976

Guess? Inc Quarterly Data

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
Gross_Profit 276335235252248333197249228302
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