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GuruFocus has detected 4 Warning Signs with Abercrombie & Fitch Co $ANF.
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Abercrombie & Fitch Co (NYSE:ANF)
Gross Profit
$2,029 Mil (TTM As of Jan. 2017)

Abercrombie & Fitch Co's gross profit for the three months ended in Jan. 2017 was $615 Mil. Abercrombie & Fitch Co's gross profit for the trailing twelve months (TTM) ended in Jan. 2017 was $2,029 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Abercrombie & Fitch Co's gross profit for the three months ended in Jan. 2017 was $615 Mil. Abercrombie & Fitch Co's revenue for the three months ended in Jan. 2017 was $1,036 Mil. Therefore, Abercrombie & Fitch Co's Gross Margin for the quarter that ended in Jan. 2017 was 59.34%.

Abercrombie & Fitch Co had a gross margin of 59.34% for the quarter that ended in Jan. 2017 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Abercrombie & Fitch Co was 66.97%. The lowest was 60.58%. And the median was 62.50%.


Definition

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

Abercrombie & Fitch Co's Gross Profit for the fiscal year that ended in Jan. 2017 is calculated as

Gross Profit (A: Jan. 2017 )=Revenue - Cost of Goods Sold
=3326.74 - 1298.172
=2,029

Abercrombie & Fitch Co's Gross Profit for the quarter that ended in Jan. 2017 is calculated as

Gross Profit (Q: Jan. 2017 )=Revenue - Cost of Goods Sold
=1036.363 - 421.362
=615

Abercrombie & Fitch Co Gross Profit for the trailing twelve months (TTM) ended in Jan. 2017 was 425.721 (Apr. 2016 ) + 477.107 (Jul. 2016 ) + 510.739 (Oct. 2016 ) + 615.001 (Jan. 2017 ) = $2,029 Mil.

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

Abercrombie & Fitch Co's Gross Margin for the quarter that ended in Jan. 2017 is calculated as

Gross Margin (Q: Jan. 2017 )=Gross Profit (Q: Jan. 2017 ) / Revenue (Q: Jan. 2017 )
=(Revenue - Cost of Goods Sold) / Revenue
=615 / 1036.363
=59.34 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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

Abercrombie & Fitch Co had a gross margin of 59.34% for the quarter that ended in Jan. 2017 => Durable competitive advantage


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 local exchange's currency.

Abercrombie & Fitch Co Annual Data

Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16Jan17
Gross_Profit 2,5112,3621,8842,2122,5192,8172,5752,3142,1582,029

Abercrombie & Fitch Co Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
Gross_Profit 567682412510560676426477511615
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