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GuruFocus has detected 8 Warning Signs with Tiffany & Co $TIF.
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Tiffany & Co (NYSE:TIF)
Gross Profit
$2,467 Mil (TTM As of Oct. 2016)

Tiffany & Co's gross profit for the three months ended in Oct. 2016 was $580 Mil. Tiffany & Co's gross profit for the trailing twelve months (TTM) ended in Oct. 2016 was $2,467 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Tiffany & Co's gross profit for the three months ended in Oct. 2016 was $580 Mil. Tiffany & Co's revenue for the three months ended in Oct. 2016 was $949 Mil. Therefore, Tiffany & Co's Gross Margin for the quarter that ended in Oct. 2016 was 61.04%.

Tiffany & Co had a gross margin of 61.04% for the quarter that ended in Oct. 2016 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Tiffany & Co was 61.89%. The lowest was 56.39%. And the median was 57.93%.


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. 2016 is calculated as

Gross Profit (A: Jan. 2016 )=Revenue - Cost of Goods Sold
=4104.9 - 1613.6
=2,491

Tiffany & Co's Gross Profit for the quarter that ended in Oct. 2016 is calculated as

Gross Profit (Q: Oct. 2016 )=Revenue - Cost of Goods Sold
=949.3 - 369.8
=580

Tiffany & Co Gross Profit for the trailing twelve months (TTM) ended in Oct. 2016 was 764.8 (Jan. 2016 ) + 545.6 (Apr. 2016 ) + 577.1 (Jul. 2016 ) + 579.5 (Oct. 2016 ) = $2,467 Mil.

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

Tiffany & Co's Gross Margin for the quarter that ended in Oct. 2016 is calculated as

Gross Margin (Q: Oct. 2016 )=Gross Profit (Q: Oct. 2016 ) / Revenue (Q: Oct. 2016 )
=(Revenue - Cost of Goods Sold) / Revenue
=580 / 949.3
=61.04 %

* 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 61.04% for the quarter that ended in Oct. 2016 => 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

Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16
Gross_Profit 1,4731,6571,6461,5301,8222,1512,1632,3402,5372,491

Tiffany & Co Quarterly Data

Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16
Gross_Profit 595571782569593565765546577580
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