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GuruFocus has detected 4 Warning Signs with Village Super Market Inc \$VLGEA.
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Village Super Market Inc (NAS:VLGEA)
Gross Profit
\$443 Mil (TTM As of Jan. 2017)

Village Super Market Inc's gross profit for the three months ended in Jan. 2017 was \$111 Mil. Village Super Market Inc's gross profit for the trailing twelve months (TTM) ended in Jan. 2017 was \$443 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Village Super Market Inc's gross profit for the three months ended in Jan. 2017 was \$111 Mil. Village Super Market Inc's revenue for the three months ended in Jan. 2017 was \$412 Mil. Therefore, Village Super Market Inc's Gross Margin for the quarter that ended in Jan. 2017 was 26.99%.

Village Super Market Inc had a gross margin of 26.99% for the quarter that ended in Jan. 2017 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Village Super Market Inc was 27.36%. The lowest was 26.90%. And the median was 27.12%.

Definition

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

Village Super Market Inc's Gross Profit for the fiscal year that ended in Jul. 2016 is calculated as

 Gross Profit (A: Jul. 2016 ) = Revenue - Cost of Goods Sold = 1634.904 - 1189.874 = 445

Village Super Market Inc's Gross Profit for the quarter that ended in Jan. 2017 is calculated as

 Gross Profit (Q: Jan. 2017 ) = Revenue - Cost of Goods Sold = 412.215 - 300.977 = 111

Village Super Market Inc Gross Profit for the trailing twelve months (TTM) ended in Jan. 2017 was 106.738 (Apr. 2016 ) + 120.08 (Jul. 2016 ) + 104.648 (Oct. 2016 ) + 111.238 (Jan. 2017 ) = \$443 Mil.

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

Village Super Market Inc'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 = 111 / 412.215 = 26.99 %

* 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

Village Super Market Inc had a gross margin of 26.99% for the quarter that ended in Jan. 2017 => Competition eroding margins

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.

Village Super Market Inc Annual Data

 Jul07 Jul08 Jul09 Jul10 Jul11 Jul12 Jul13 Jul14 Jul15 Jul16 Gross_Profit 282 305 331 343 350 389 398 408 433 445

Village Super Market Inc Quarterly Data

 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Gross_Profit 103 111 107 112 105 113 107 120 105 111
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