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GuruFocus has detected 5 Warning Signs with Tiffany & Co $TIF.
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Tiffany & Co (NYSE:TIF)
Gross Profit
$2,490 Mil (TTM As of Jan. 2017)

Tiffany & Co's gross profit for the three months ended in Jan. 2017 was $788 Mil. Tiffany & Co's gross profit for the trailing twelve months (TTM) ended in Jan. 2017 was $2,490 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Tiffany & Co's gross profit for the three months ended in Jan. 2017 was $788 Mil. Tiffany & Co's revenue for the three months ended in Jan. 2017 was $1,230 Mil. Therefore, Tiffany & Co's Gross Margin for the quarter that ended in Jan. 2017 was 64.10%.

Tiffany & Co had a gross margin of 64.10% for the quarter that ended in Jan. 2017 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Tiffany & Co was 62.23%. The lowest was 56.39%. And the median was 58.56%.


Definition

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

Tiffany & Co's Gross Profit for the fiscal year that ended in Jan. 2017 is calculated as

Gross Profit (A: Jan. 2017 )=Revenue - Cost of Goods Sold
=4001.8 - 1511.5
=2,490

Tiffany & Co's Gross Profit for the quarter that ended in Jan. 2017 is calculated as

Gross Profit (Q: Jan. 2017 )=Revenue - Cost of Goods Sold
=1229.6 - 441.4
=788

Tiffany & Co Gross Profit for the trailing twelve months (TTM) ended in Jan. 2017 was 545.6 (Apr. 2016 ) + 577.1 (Jul. 2016 ) + 579.5 (Oct. 2016 ) + 788.2 (Jan. 2017 ) = $2,490 Mil.

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

Tiffany & Co's Gross Margin for the quarter that ended in Jan. 2017 is calculated as

Gross Margin (Q: Jan. 2017 )=Gross Profit (Q: Jan. 2017 ) / Revenue (Q: Jan. 2017 )
=(Revenue - Cost of Goods Sold) / Revenue
=788 / 1229.6
=64.10 %

* 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

Tiffany & Co had a gross margin of 64.10% for the quarter that ended in Jan. 2017 => 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.

Tiffany & Co Annual Data

Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16Jan17
Gross_Profit 1,6571,6461,5301,8222,1512,1632,3402,5372,4912,490

Tiffany & Co Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
Gross_Profit 571782569593565765546577580788
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