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Constellation Brands Inc (NYSE:STZ)
Gross Profit
$2,406 Mil (TTM As of May. 2014)

Constellation Brands Inc's gross profit for the three months ended in May. 2014 was $670 Mil. Constellation Brands Inc's gross profit for the trailing twelve months (TTM) ended in May. 2014 was $2,406 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Constellation Brands Inc's gross profit for the three months ended in May. 2014 was $670 Mil. Constellation Brands Inc's revenue for the three months ended in May. 2014 was $1,526 Mil. Therefore, Constellation Brands Inc's Gross Margin for the quarter that ended in May. 2014 was 43.91%.

Constellation Brands Inc had a gross margin of 43.91% for the quarter that ended in May. 2014 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Constellation Brands Inc was 63.21%. The lowest was 27.47%. And the median was 32.53%.


Definition

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

Constellation Brands Inc's Gross Profit for the fiscal year that ended in Feb. 2014 is calculated as

Gross Profit (A: Feb. 2014 )=Revenue - Cost of Goods Sold
=4867.7 - 2876
=1,992

Constellation Brands Inc's Gross Profit for the quarter that ended in May. 2014 is calculated as

Gross Profit (Q: May. 2014 )=Revenue - Cost of Goods Sold
=1526 - 855.9
=670

Constellation Brands Inc Gross Profit for the trailing twelve months (TTM) ended in May. 2014 was 577 (Aug. 2013 ) + 609.7 (Nov. 2013 ) + 548.9 (Feb. 2014 ) + 670.1 (May. 2014 ) = $2,406 Mil.

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

Constellation Brands Inc's Gross Margin for the quarter that ended in May. 2014 is calculated as

Gross Margin (Q: May. 2014 )=Gross Profit (Q: May. 2014 ) / Revenue (Q: May. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=670 / 1526
=43.91 %

* 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

Constellation Brands Inc had a gross margin of 43.91% for the quarter that ended in May. 2014 => 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 own currency.

Constellation Brands Inc Annual Data

Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14
Gross_Profit 1,1411,3251,5241,2821,2301,1451,1901,0621,1081,992

Constellation Brands Inc Quarterly Data

Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14
Gross_Profit 245251285311262256577610549670
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