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McCormick & Co Inc (NYSE:MKC)
Gross Profit
\$1,813 Mil (TTM As of Aug. 2016)

McCormick & Co Inc's gross profit for the three months ended in Aug. 2016 was \$454 Mil. McCormick & Co Inc's gross profit for the trailing twelve months (TTM) ended in Aug. 2016 was \$1,813 Mil.

Gross Margin is calculated as gross profit divided by its revenue. McCormick & Co Inc's gross profit for the three months ended in Aug. 2016 was \$454 Mil. McCormick & Co Inc's revenue for the three months ended in Aug. 2016 was \$1,091 Mil. Therefore, McCormick & Co Inc's Gross Margin for the quarter that ended in Aug. 2016 was 41.60%.

McCormick & Co Inc had a gross margin of 41.60% for the quarter that ended in Aug. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of McCormick & Co Inc was 42.49%. The lowest was 40.30%. And the median was 40.83%.

Definition

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

McCormick & Co Inc's Gross Profit for the fiscal year that ended in Nov. 2015 is calculated as

 Gross Profit (A: Nov. 2015 ) = Revenue - Cost of Goods Sold = 4296.3 - 2559 = 1,737

McCormick & Co Inc's Gross Profit for the quarter that ended in Aug. 2016 is calculated as

 Gross Profit (Q: Aug. 2016 ) = Revenue - Cost of Goods Sold = 1091 - 637.1 = 454

McCormick & Co Inc Gross Profit for the trailing twelve months (TTM) ended in Aug. 2016 was 521.7 (Nov. 2015 ) + 405 (Feb. 2016 ) + 432.8 (May. 2016 ) + 453.9 (Aug. 2016 ) = \$1,813 Mil.

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

McCormick & Co Inc's Gross Margin for the quarter that ended in Aug. 2016 is calculated as

 Gross Margin (Q: Aug. 2016 ) = Gross Profit (Q: Aug. 2016 ) / Revenue (Q: Aug. 2016 ) = (Revenue - Cost of Goods Sold) / Revenue = 454 / 1091 = 41.60 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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

McCormick & Co Inc had a gross margin of 41.60% for the quarter that ended in Aug. 2016 => Durable competitive advantage

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

McCormick & Co Inc Annual Data

 Nov06 Nov07 Nov08 Nov09 Nov10 Nov11 Nov12 Nov13 Nov14 Nov15 Gross_Profit 1,115 1,192 1,288 1,327 1,418 1,523 1,618 1,666 1,730 1,737

McCormick & Co Inc Quarterly Data

 May14 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Gross_Profit 413 420 506 390 404 422 522 405 433 454
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