Switch to:
Nike Inc (NYSE:NKE)
Gross Profit
$14,778 Mil (TTM As of Feb. 2016)

Nike Inc's gross profit for the three months ended in Feb. 2016 was $3,689 Mil. Nike Inc's gross profit for the trailing twelve months (TTM) ended in Feb. 2016 was $14,778 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Nike Inc's gross profit for the three months ended in Feb. 2016 was $3,689 Mil. Nike Inc's revenue for the three months ended in Feb. 2016 was $8,032 Mil. Therefore, Nike Inc's Gross Margin for the quarter that ended in Feb. 2016 was 45.93%.

Nike Inc had a gross margin of 45.93% for the quarter that ended in Feb. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Nike Inc was 46.28%. The lowest was 43.40%. And the median was 44.82%.


Definition

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

Nike Inc's Gross Profit for the fiscal year that ended in May. 2015 is calculated as

Gross Profit (A: May. 2015 )=Revenue - Cost of Goods Sold
=30601 - 16534
=14,067

Nike Inc's Gross Profit for the quarter that ended in Feb. 2016 is calculated as

Gross Profit (Q: Feb. 2016 )=Revenue - Cost of Goods Sold
=8032 - 4343
=3,689

Nike Inc Gross Profit for the trailing twelve months (TTM) ended in Feb. 2016 was 3593 (May. 2015 ) + 3995 (Aug. 2015 ) + 3501 (Nov. 2015 ) + 3689 (Feb. 2016 ) = $14,778 Mil.

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

Nike Inc's Gross Margin for the quarter that ended in Feb. 2016 is calculated as

Gross Margin (Q: Feb. 2016 )=Gross Profit (Q: Feb. 2016 ) / Revenue (Q: Feb. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=3,689 / 8032
=45.93 %

* 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

Nike Inc had a gross margin of 45.93% for the quarter that ended in Feb. 2016 => 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.

Nike Inc Annual Data

May07May08May09May10May11May12May13May14May15May16
Gross_Profit 7,1618,3878,6048,8009,50810,47111,03412,44614,06714,971

Nike Inc Quarterly Data

Feb14May14Aug14Nov14Feb15May15Aug15Nov15Feb16May16
Gross_Profit 3,1033,3853,7213,3273,4263,5933,9953,5013,6893,786
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK