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Wal-Mart Stores Inc (NYSE:WMT)
Gross Profit
$119,850 Mil (TTM As of Oct. 2014)

Wal-Mart Stores Inc's gross profit for the three months ended in Oct. 2014 was $29,754 Mil. Wal-Mart Stores Inc's gross profit for the trailing twelve months (TTM) ended in Oct. 2014 was $119,850 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Wal-Mart Stores Inc's gross profit for the three months ended in Oct. 2014 was $29,754 Mil. Wal-Mart Stores Inc's revenue for the three months ended in Oct. 2014 was $119,001 Mil. Therefore, Wal-Mart Stores Inc's Gross Margin for the quarter that ended in Oct. 2014 was 25.00%.

Wal-Mart Stores Inc had a gross margin of 25.00% for the quarter that ended in Oct. 2014 => Competition eroding margins

During the past 13 years, the highest Gross Margin of Wal-Mart Stores Inc was 25.40%. The lowest was 21.75%. And the median was 23.45%.


Definition

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

Wal-Mart Stores Inc's Gross Profit for the fiscal year that ended in Jan. 2014 is calculated as

Gross Profit (A: Jan. 2014 )=Revenue - Cost of Goods Sold
=476294 - 358069
=118,225

Wal-Mart Stores Inc's Gross Profit for the quarter that ended in Oct. 2014 is calculated as

Gross Profit (Q: Oct. 2014 )=Revenue - Cost of Goods Sold
=119001 - 89247
=29,754

Wal-Mart Stores Inc Gross Profit for the trailing twelve months (TTM) ended in Oct. 2014 was 31735 (Jan. 2014 ) + 28246 (Apr. 2014 ) + 30115 (Jul. 2014 ) + 29754 (Oct. 2014 ) = $119,850 Mil.

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

Wal-Mart Stores Inc's Gross Margin for the quarter that ended in Oct. 2014 is calculated as

Gross Margin (Q: Oct. 2014 )=Gross Profit (Q: Oct. 2014 ) / Revenue (Q: Oct. 2014 )
=(Revenue - Cost of Goods Sold) / Revenue
=29,754 / 119001
=25.00 %

* 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

Wal-Mart Stores Inc had a gross margin of 25.00% for the quarter that ended in Oct. 2014 => Competition eroding margins


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.

Wal-Mart Stores Inc Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
Gross_Profit 67,47874,45284,38992,126100,318103,641106,903111,823116,354118,225

Wal-Mart Stores Inc Quarterly Data

Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14
Gross_Profit 28,63928,33031,70528,07929,41029,00131,73528,24630,11529,754
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