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TJX Companies Inc (NYSE:TJX)
Gross Margin
29.42% (As of Jul. 2016)

Gross Margin is calculated as gross profit divided by its revenue. TJX Companies Inc's gross profit for the three months ended in Jul. 2016 was $2,319 Mil. TJX Companies Inc's revenue for the three months ended in Jul. 2016 was $7,882 Mil. Therefore, TJX Companies Inc's Gross Margin for the quarter that ended in Jul. 2016 was 29.42%.

TJX' s Gross Margin Range Over the Past 10 Years
Min: 24.05   Max: 28.97
Current: 28.97

24.05
28.97

During the past 13 years, the highest Gross Margin of TJX Companies Inc was 28.97%. The lowest was 24.05%. And the median was 27.12%.

TJX's Gross Margin is ranked lower than
63% of the 943 Companies
in the Global Apparel Stores industry.

( Industry Median: 35.21 vs. TJX: 28.97 )

TJX Companies Inc had a gross margin of 29.42% for the quarter that ended in Jul. 2016 => Competition eroding margins

The 5-Year average Growth Rate of Gross Margin for TJX Companies Inc was 1.40% per year.


Definition

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

TJX Companies Inc'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 )
=8910.4 / 30944.938
=(Revenue - Cost of Goods Sold) / Revenue
=(30944.938 - 22034.523) / 30944.938
=28.79 %

TJX Companies Inc's Gross Margin for the quarter that ended in Jul. 2016 is calculated as

Gross Margin (Q: Jul. 2016 )=Gross Profit (Q: Jul. 2016 ) / Revenue (Q: Jul. 2016 )
=2319.1 / 7882.053
=(Revenue - Cost of Goods Sold) / Revenue
=(7882.053 - 5562.961) / 7882.053
=29.42 %

* 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

TJX Companies Inc had a gross margin of 29.42% for the quarter that ended in Jul. 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.

TJX Companies Inc Annual Data

Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16
Gross Margin 24.1724.5124.0526.2226.9027.3328.4328.5128.5528.79

TJX Companies Inc Quarterly Data

Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16
Gross Margin 27.9328.6429.3628.2428.3429.1228.9828.7228.7729.42
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