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Francescas Holdings Corp (NAS:FRAN)
Gross Margin
48.97% (As of Apr. 2014)

Gross Margin is calculated as gross profit divided by its revenue. Francescas Holdings Corp's gross profit for the three months ended in Apr. 2014 was $41.8 Mil. Francescas Holdings Corp's revenue for the three months ended in Apr. 2014 was $85.4 Mil. Therefore, Francescas Holdings Corp's Gross Margin for the quarter that ended in Apr. 2014 was 48.97%.

FRAN' s 10-Year Gross Margin Range
Min: 51.73   Max: 53.48
Current: 51.73

51.73
53.48

During the past 5 years, the highest Gross Margin of Francescas Holdings Corp was 53.48%. The lowest was 51.73%. And the median was 52.31%.

FRAN's Gross Marginis ranked lower than
100% of the Companies
in the Global Specialty Retail industry.

( Industry Median: vs. FRAN: 51.73 )

Francescas Holdings Corp had a gross margin of 48.97% for the quarter that ended in Apr. 2014 => Durable competitive advantage

The 3-Year average Growth Rate of Gross Margin for Francescas Holdings Corp was 0.00% per year.


Definition

Gross Margin is the percentage of Gross Profit out of sales or Revenue.

Francescas Holdings Corp's Gross Margin for the fiscal year that ended in Jan. 2014 is calculated as

Gross Margin (A: Jan. 2014 )=Gross Profit (A: Jan. 2014 ) / Revenue (A: Jan. 2014 )
=176.1 / 340.325
=(Revenue - Cost of Goods Sold) / Revenue
=(340.325 - 164.26) / 340.325
=51.73 %

Francescas Holdings Corp's Gross Margin for the quarter that ended in Apr. 2014 is calculated as

Gross Margin (Q: Apr. 2014 )=Gross Profit (Q: Apr. 2014 ) / Revenue (Q: Apr. 2014 )
=41.8 / 85.424
=(Revenue - Cost of Goods Sold) / Revenue
=(85.424 - 43.592) / 85.424
=48.97 %

* 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

Francescas Holdings Corp had a gross margin of 48.97% for the quarter that ended in Apr. 2014 => Durable competitive advantage


Be Aware

If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin and Operating Margin closely helps avoid value trap situations.


Related Terms

Operating Margin, Cost of Goods Sold, Gross Profit, Revenue


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Francescas Holdings Corp Annual Data

Jan10Jan11Jan12Jan13Jan14
Gross Margin 0.000.000.000.000.0053.0751.9152.3153.4851.73

Francescas Holdings Corp Quarterly Data

Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14
Gross Margin 52.4553.0754.7652.6153.3752.3853.3250.6850.5548.97
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