Switch to:
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Sonic Corp (NAS:SONC)
Gross Profit
\$246.2 Mil (TTM As of Nov. 2016)

Sonic Corp's gross profit for the three months ended in Nov. 2016 was \$54.2 Mil. Sonic Corp's gross profit for the trailing twelve months (TTM) ended in Nov. 2016 was \$246.2 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Sonic Corp's gross profit for the three months ended in Nov. 2016 was \$54.2 Mil. Sonic Corp's revenue for the three months ended in Nov. 2016 was \$129.6 Mil. Therefore, Sonic Corp's Gross Margin for the quarter that ended in Nov. 2016 was 41.87%.

Sonic Corp had a gross margin of 41.87% for the quarter that ended in Nov. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Sonic Corp was 41.72%. The lowest was 31.89%. And the median was 36.03%.

Definition

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

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

 Gross Profit (A: Aug. 2016 ) = Revenue - Cost of Goods Sold = 606.32 - 356.82 = 249.5

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

 Gross Profit (Q: Nov. 2016 ) = Revenue - Cost of Goods Sold = 129.551 - 75.308 = 54.2

Sonic Corp Gross Profit for the trailing twelve months (TTM) ended in Nov. 2016 was 51.488 (Feb. 2016 ) + 70.796 (May. 2016 ) + 69.631 (Aug. 2016 ) + 54.243 (Nov. 2016 ) = \$246.2 Mil.

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

Sonic Corp'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 = 54.2 / 129.551 = 41.87 %

* 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

Sonic Corp had a gross margin of 41.87% for the quarter that ended in Nov. 2016 => Durable competitive advantage

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.

Sonic Corp Annual Data

 Aug07 Aug08 Aug09 Aug10 Aug11 Aug12 Aug13 Aug14 Aug15 Aug16 Gross_Profit 276.9 256.6 241.4 196.3 189.7 196.3 199.4 210.2 242.2 249.5

Sonic Corp Quarterly Data

 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Gross_Profit 4.2 53.4 46.6 68.2 74.0 57.6 51.5 70.8 69.6 54.2
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)