Switch to:
GuruFocus has detected 2 Warning Signs with Regis Corp \$RGS.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Regis Corp (NYSE:RGS)
Gross Profit
\$720 Mil (TTM As of Dec. 2016)

Regis Corp's gross profit for the three months ended in Dec. 2016 was \$169 Mil. Regis Corp's gross profit for the trailing twelve months (TTM) ended in Dec. 2016 was \$720 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Regis Corp's gross profit for the three months ended in Dec. 2016 was \$169 Mil. Regis Corp's revenue for the three months ended in Dec. 2016 was \$424 Mil. Therefore, Regis Corp's Gross Margin for the quarter that ended in Dec. 2016 was 39.90%.

Regis Corp had a gross margin of 39.90% for the quarter that ended in Dec. 2016 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Regis Corp was 46.88%. The lowest was 41.23%. And the median was 45.12%.

Warning Sign:

Regis Corp gross margin has been in long term decline. The average rate of decline per year is -1.8%.

Definition

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

Regis Corp's Gross Profit for the fiscal year that ended in Jun. 2016 is calculated as

 Gross Profit (A: Jun. 2016 ) = Revenue - Cost of Goods Sold = 1790.869 - 1047.529 = 743

Regis Corp's Gross Profit for the quarter that ended in Dec. 2016 is calculated as

 Gross Profit (Q: Dec. 2016 ) = Revenue - Cost of Goods Sold = 424.043 - 254.841 = 169

Regis Corp Gross Profit for the trailing twelve months (TTM) ended in Dec. 2016 was 182.519 (Mar. 2016 ) + 188.084 (Jun. 2016 ) + 179.8 (Sep. 2016 ) + 169.202 (Dec. 2016 ) = \$720 Mil.

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

Regis Corp's Gross Margin for the quarter that ended in Dec. 2016 is calculated as

 Gross Margin (Q: Dec. 2016 ) = Gross Profit (Q: Dec. 2016 ) / Revenue (Q: Dec. 2016 ) = (Revenue - Cost of Goods Sold) / Revenue = 169 / 424.043 = 39.90 %

* 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

Regis Corp had a gross margin of 39.90% for the quarter that ended in Dec. 2016 => Competition eroding margins

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.

Regis Corp Annual Data

 Jun07 Jun08 Jun09 Jun10 Jun11 Jun12 Jun13 Jun14 Jun15 Jun16 Gross_Profit 1,231 1,252 1,102 1,079 982 959 859 798 774 743

Regis Corp Quarterly Data

 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Gross_Profit 196 188 192 198 189 183 183 188 180 169
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)