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GuruFocus has detected 1 Warning Sign with New York & Co Inc $NWY.
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New York & Co Inc (NYSE:NWY)
Gross Profit
$264.0 Mil (TTM As of Jan. 2017)

New York & Co Inc's gross profit for the three months ended in Jan. 2017 was $73.1 Mil. New York & Co Inc's gross profit for the trailing twelve months (TTM) ended in Jan. 2017 was $264.0 Mil.

Gross Margin is calculated as gross profit divided by its revenue. New York & Co Inc's gross profit for the three months ended in Jan. 2017 was $73.1 Mil. New York & Co Inc's revenue for the three months ended in Jan. 2017 was $266.3 Mil. Therefore, New York & Co Inc's Gross Margin for the quarter that ended in Jan. 2017 was 27.43%.

New York & Co Inc had a gross margin of 27.43% for the quarter that ended in Jan. 2017 => Competition eroding margins

During the past 13 years, the highest Gross Margin of New York & Co Inc was 28.72%. The lowest was 22.84%. And the median was 27.23%.


Definition

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

New York & Co Inc's Gross Profit for the fiscal year that ended in Jan. 2017 is calculated as

Gross Profit (A: Jan. 2017 )=Revenue - Cost of Goods Sold
=929.081 - 665.102
=264.0

New York & Co Inc's Gross Profit for the quarter that ended in Jan. 2017 is calculated as

Gross Profit (Q: Jan. 2017 )=Revenue - Cost of Goods Sold
=266.323 - 193.265
=73.1

New York & Co Inc Gross Profit for the trailing twelve months (TTM) ended in Jan. 2017 was 59.887 (Apr. 2016 ) + 67.05 (Jul. 2016 ) + 63.984 (Oct. 2016 ) + 73.058 (Jan. 2017 ) = $264.0 Mil.

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

New York & Co Inc's Gross Margin for the quarter that ended in Jan. 2017 is calculated as

Gross Margin (Q: Jan. 2017 )=Gross Profit (Q: Jan. 2017 ) / Revenue (Q: Jan. 2017 )
=(Revenue - Cost of Goods Sold) / Revenue
=73.1 / 266.323
=27.43 %

* 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

New York & Co Inc had a gross margin of 27.43% for the quarter that ended in Jan. 2017 => 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 local exchange's currency.

New York & Co Inc Annual Data

Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16Jan17
Gross_Profit 343.2296.4252.6233.3221.6264.8264.4249.8264.9264.0

New York & Co Inc Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
Gross_Profit 57.368.464.267.163.769.859.967.164.073.1
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