Switch to:
GuruFocus has detected 7 Warning Signs with The Scotts Miracle Gro Co $SMG.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
The Scotts Miracle Gro Co (NYSE:SMG)
Gross Profit
$1,023 Mil (TTM As of Dec. 2016)

The Scotts Miracle Gro Co's gross profit for the three months ended in Dec. 2016 was $44 Mil. The Scotts Miracle Gro Co's gross profit for the trailing twelve months (TTM) ended in Dec. 2016 was $1,023 Mil.

Gross Margin is calculated as gross profit divided by its revenue. The Scotts Miracle Gro Co's gross profit for the three months ended in Dec. 2016 was $44 Mil. The Scotts Miracle Gro Co's revenue for the three months ended in Dec. 2016 was $247 Mil. Therefore, The Scotts Miracle Gro Co's Gross Margin for the quarter that ended in Dec. 2016 was 17.91%.

The Scotts Miracle Gro Co had a gross margin of 17.91% for the quarter that ended in Dec. 2016 => No sustainable competitive advantage

During the past 13 years, the highest Gross Margin of The Scotts Miracle Gro Co was 37.13%. The lowest was 31.51%. And the median was 35.04%.


Definition

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

The Scotts Miracle Gro Co's Gross Profit for the fiscal year that ended in Sep. 2016 is calculated as

Gross Profit (A: Sep. 2016 )=Revenue - Cost of Goods Sold
=2836.1 - 1840.7
=995

The Scotts Miracle Gro Co's Gross Profit for the quarter that ended in Dec. 2016 is calculated as

Gross Profit (Q: Dec. 2016 )=Revenue - Cost of Goods Sold
=246.8 - 202.6
=44

The Scotts Miracle Gro Co Gross Profit for the trailing twelve months (TTM) ended in Dec. 2016 was 521.6 (Mar. 2016 ) + 357.4 (Jun. 2016 ) + 99.7 (Sep. 2016 ) + 44.2 (Dec. 2016 ) = $1,023 Mil.

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

The Scotts Miracle Gro Co'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
=44 / 246.8
=17.91 %

* 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

The Scotts Miracle Gro Co had a gross margin of 17.91% for the quarter that ended in Dec. 2016 => No sustainable 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.

The Scotts Miracle Gro Co Annual Data

Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15Sep16
Gross_Profit 1,0059401,0581,0761,009957978890908995

The Scotts Miracle Gro Co Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
Gross_Profit -129425386911752235710044
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