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Pep Boys - Manny, Moe & Jack (NYSE:PBY)
Gross Profit
$487 Mil (TTM As of Jan. 2014)

Pep Boys - Manny, Moe & Jack's gross profit for the three months ended in Jan. 2014 was $104 Mil. Pep Boys - Manny, Moe & Jack's gross profit for the trailing twelve months (TTM) ended in Jan. 2014 was $487 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Pep Boys - Manny, Moe & Jack's gross profit for the three months ended in Jan. 2014 was $104 Mil. Pep Boys - Manny, Moe & Jack's revenue for the three months ended in Jan. 2014 was $496 Mil. Therefore, Pep Boys - Manny, Moe & Jack's Gross Margin for the quarter that ended in Jan. 2014 was 20.98%.

Pep Boys - Manny, Moe & Jack had a gross margin of 20.98% for the quarter that ended in Jan. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Pep Boys - Manny, Moe & Jack was 32.99%. The lowest was 21.99%. And the median was 26.86%.


Definition

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

Pep Boys - Manny, Moe & Jack'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
=2066.568 - 1579.191
=487

Pep Boys - Manny, Moe & Jack's Gross Profit for the quarter that ended in Jan. 2014 is calculated as

Gross Profit (Q: Jan. 2014 )=Revenue - Cost of Goods Sold
=495.733 - 391.717
=104

Pep Boys - Manny, Moe & Jack Gross Profit for the trailing twelve months (TTM) ended in Jan. 2014 was 121.84 (Apr. 2013 ) + 138.708 (Jul. 2013 ) + 122.812 (Oct. 2013 ) + 104.016 (Jan. 2014 ) = $487 Mil.

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

Pep Boys - Manny, Moe & Jack'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
=104 / 495.733
=20.98 %

* 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

Pep Boys - Manny, Moe & Jack had a gross margin of 20.98% 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.

Pep Boys - Manny, Moe & Jack Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
Gross_Profit 611502566486465486522510492487

Pep Boys - Manny, Moe & Jack Quarterly Data

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
Gross_Profit 127112128131116117122139123104
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