Gross Margin % is calculated as gross profit divided by its revenue. Herbalife's Gross Profit for the
three
months ended in Dec. 2023 was $927 Mil. Herbalife's Revenue for the
three
months ended in Dec. 2023 was $1,215 Mil. Therefore, Herbalife's Gross Margin % for the quarter that ended in Dec. 2023 was 76.33%.
Warning Sign:
Herbalife Ltd gross margin has been in long-term decline. The average rate of decline per year is -1.2%.
The historical rank and industry rank for Herbalife's Gross Margin % or its related term are showing as below:
HLF'
s Gross Margin % Range Over the Past 10 Years
Min: 76.47 Med: 80.27 Max: 81.21
Current: 76.47
During the past 13 years, the highestGross Margin % of Herbalife was 81.21%. The lowest was 76.47%. And the median was 80.27%.
HLF's Gross Margin % is ranked better than 96.52% of 1808
companies
in the Consumer Packaged Goods industry
Industry Median: 25.04
vs HLF: 76.47
Herbalife had a gross margin of 76.33% for the quarter that ended in Dec. 2023 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for Herbalife was -1.20% per year.
Herbalife Gross Margin % Historical Data
The historical data trend for Herbalife's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Packaged Foods subindustry, Herbalife's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Herbalife Gross Margin % Distribution
For the Consumer Packaged Goods industry and Consumer Defensive sector, Herbalife's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Herbalife's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange 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.
Herbalife (NYSE:HLF) Gross Margin % 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
Herbalife had a gross margin of 76.33% for the quarter that ended in Dec. 2023 => 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.
Herbalife Gross Margin % Related Terms
Thank you for viewing the detailed overview of Herbalife's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
Herbalife Ltd is an international nutrition company that provides health and wellness products to consumers in 95 markets, which consists of countries and territories, through their direct-selling business model. Companies' products are weight management; targeted nutrition; Energy, Sports, and Fitness; Outer Nutrition and Literature, Promotional, and Other. Weight management generates the majority of revenue from products like Meal replacement, protein shakes, drink mixes, weight loss enhancers, and healthy snacks. Geographically, the main segments are North America, Mexico, South and Central America, EMEA, Asia-Pacific, and China.
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