Switch to:
GuruFocus has detected 10 Warning Signs with Pier 1 Imports Inc $PIR.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Pier 1 Imports Inc (NYSE:PIR)
Gross Profit
$687 Mil (TTM As of Nov. 2016)

Pier 1 Imports Inc's gross profit for the three months ended in Nov. 2016 was $196 Mil. Pier 1 Imports Inc's gross profit for the trailing twelve months (TTM) ended in Nov. 2016 was $687 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Pier 1 Imports Inc's gross profit for the three months ended in Nov. 2016 was $196 Mil. Pier 1 Imports Inc's revenue for the three months ended in Nov. 2016 was $476 Mil. Therefore, Pier 1 Imports Inc's Gross Margin for the quarter that ended in Nov. 2016 was 41.27%.

Pier 1 Imports Inc had a gross margin of 41.27% for the quarter that ended in Nov. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Pier 1 Imports Inc was 43.58%. The lowest was 27.52%. And the median was 38.52%.

Warning Sign:

Pier 1 Imports Inc gross margin has been in long term decline. The average rate of decline per year is -1.3%.


Definition

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

Pier 1 Imports Inc's Gross Profit for the fiscal year that ended in Feb. 2016 is calculated as

Gross Profit (A: Feb. 2016 )=Revenue - Cost of Goods Sold
=1892.23 - 1187.25
=705

Pier 1 Imports Inc's Gross Profit for the quarter that ended in Nov. 2016 is calculated as

Gross Profit (Q: Nov. 2016 )=Revenue - Cost of Goods Sold
=475.901 - 279.508
=196

Pier 1 Imports Inc Gross Profit for the trailing twelve months (TTM) ended in Nov. 2016 was 196.894 (Feb. 2016 ) + 148.967 (May. 2016 ) + 145.036 (Aug. 2016 ) + 196.393 (Nov. 2016 ) = $687 Mil.

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

Pier 1 Imports Inc's Gross Margin for the quarter that ended in Nov. 2016 is calculated as

Gross Margin (Q: Nov. 2016 )=Gross Profit (Q: Nov. 2016 ) / Revenue (Q: Nov. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=196 / 475.901
=41.27 %

* 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

Pier 1 Imports Inc had a gross margin of 41.27% for the quarter that ended in Nov. 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 local exchange's currency.

Pier 1 Imports Inc Annual Data

Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14Feb15Feb16
Gross_Profit 474440363440555651743765768705

Pier 1 Imports Inc Quarterly Data

Aug14Nov14Feb15May15Aug15Nov15Feb16May16Aug16Nov16
Gross_Profit 163205233170155184197149145196
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