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Kohl's Corp (NYSE:KSS)
Gross Margin
35.55% (As of Apr. 2016)

Gross Margin is calculated as gross profit divided by its revenue. Kohl's Corp's gross profit for the three months ended in Apr. 2016 was $1,412 Mil. Kohl's Corp's revenue for the three months ended in Apr. 2016 was $3,972 Mil. Therefore, Kohl's Corp's Gross Margin for the quarter that ended in Apr. 2016 was 35.55%.

Warning Sign:

Kohl's Corp gross margin has been in long term decline. The average rate of decline per year is -1.2%.

KSS' s Gross Margin Range Over the Past 10 Years
Min: 36.13   Max: 38.24
Current: 35.84

36.13
38.24

During the past 13 years, the highest Gross Margin of Kohl's Corp was 38.24%. The lowest was 36.13%. And the median was 36.50%.

KSS's Gross Margin is ranked higher than
53% of the 945 Companies
in the Global Department Stores industry.

( Industry Median: 35.17 vs. KSS: 35.84 )

Kohl's Corp had a gross margin of 35.55% for the quarter that ended in Apr. 2016 => Competition eroding margins

The 5-Year average Growth Rate of Gross Margin for Kohl's Corp was -1.20% per year.


Definition

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

Kohl's Corp's Gross Margin for the fiscal year that ended in Jan. 2016 is calculated as

Gross Margin (A: Jan. 2016 )=Gross Profit (A: Jan. 2016 ) / Revenue (A: Jan. 2016 )
=6939 / 19204
=(Revenue - Cost of Goods Sold) / Revenue
=(19204 - 12265) / 19204
=36.13 %

Kohl's Corp's Gross Margin for the quarter that ended in Apr. 2016 is calculated as

Gross Margin (Q: Apr. 2016 )=Gross Profit (Q: Apr. 2016 ) / Revenue (Q: Apr. 2016 )
=1412 / 3972
=(Revenue - Cost of Goods Sold) / Revenue
=(3972 - 2560) / 3972
=35.55 %

* 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

Kohl's Corp had a gross margin of 35.55% for the quarter that ended in Apr. 2016 => Competition eroding margins


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.

Kohl's Corp Annual Data

Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16
Gross Margin 36.3736.5136.9537.8338.2438.1836.2636.4936.4036.13

Kohl's Corp Quarterly Data

Jan14Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16
Gross Margin 34.0236.7638.9937.2233.8836.9438.9537.1133.0735.55
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