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GuruFocus has detected 4 Warning Signs with Express, Inc. $EXPR.
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Express, Inc. (NYSE:EXPR)
Gross Profit
$663 Mil (TTM As of Jan. 2017)

Express, Inc.'s gross profit for the three months ended in Jan. 2017 was $193 Mil. Express, Inc.'s gross profit for the trailing twelve months (TTM) ended in Jan. 2017 was $663 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Express, Inc.'s gross profit for the three months ended in Jan. 2017 was $193 Mil. Express, Inc.'s revenue for the three months ended in Jan. 2017 was $679 Mil. Therefore, Express, Inc.'s Gross Margin for the quarter that ended in Jan. 2017 was 28.41%.

Express, Inc. had a gross margin of 28.41% for the quarter that ended in Jan. 2017 => Competition eroding margins

During the past 10 years, the highest Gross Margin of Express, Inc. was 35.59%. The lowest was 25.32%. And the median was 32.03%.

Warning Sign:

Express, Inc. gross margin has been in long term decline. The average rate of decline per year is -2.1%.


Definition

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

Express, Inc.'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
=2192.547 - 1529.343
=663

Express, Inc.'s Gross Profit for the quarter that ended in Jan. 2017 is calculated as

Gross Profit (Q: Jan. 2017 )=Revenue - Cost of Goods Sold
=678.781 - 485.961
=193

Express, Inc. Gross Profit for the trailing twelve months (TTM) ended in Jan. 2017 was 167.748 (Apr. 2016 ) + 150.919 (Jul. 2016 ) + 151.717 (Oct. 2016 ) + 192.82 (Jan. 2017 ) = $663 Mil.

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

Express, Inc.'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
=193 / 678.781
=28.41 %

* 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

Express, Inc. had a gross margin of 28.41% for the quarter that ended in Jan. 2017 => Competition eroding margins


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.

Express, Inc. Annual Data

Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16Jan17
Gross_Profit 455457546678743743718661795663

Express, Inc. Quarterly Data

Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16Oct16Jan17
Gross_Profit 158230166177191261168151152193
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