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GuruFocus has detected 5 Warning Signs with J&J Snack Foods Corp $JJSF.
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J&J Snack Foods Corp (NAS:JJSF)
Gross Profit
$313 Mil (TTM As of Jun. 2017)

J&J Snack Foods Corp's gross profit for the three months ended in Jun. 2017 was $95 Mil. J&J Snack Foods Corp's gross profit for the trailing twelve months (TTM) ended in Jun. 2017 was $313 Mil.

Gross Margin is calculated as gross profit divided by its revenue. J&J Snack Foods Corp's gross profit for the three months ended in Jun. 2017 was $95 Mil. J&J Snack Foods Corp's revenue for the three months ended in Jun. 2017 was $295 Mil. Therefore, J&J Snack Foods Corp's Gross Margin for the quarter that ended in Jun. 2017 was 32.08%.

J&J Snack Foods Corp had a gross margin of 32.08% for the quarter that ended in Jun. 2017 => Competition eroding margins

During the past 13 years, the highest Gross Margin of J&J Snack Foods Corp was 32.79%. The lowest was 29.70%. And the median was 30.85%.


Definition

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

J&J Snack Foods Corp's Gross Profit for the fiscal year that ended in Sep. 2016 is calculated as

Gross Profit (A: Sep. 2016 )=Revenue - Cost of Goods Sold
=992.781 - 688.314
=304

J&J Snack Foods Corp's Gross Profit for the quarter that ended in Jun. 2017 is calculated as

Gross Profit (Q: Jun. 2017 )=Revenue - Cost of Goods Sold
=295.415 - 200.651
=95

J&J Snack Foods Corp Gross Profit for the trailing twelve months (TTM) ended in Jun. 2017 was 79.797 (Sep. 2016 ) + 65.895 (Dec. 2016 ) + 72.817 (Mar. 2017 ) + 94.764 (Jun. 2017 ) = $313 Mil.

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

J&J Snack Foods Corp's Gross Margin for the quarter that ended in Jun. 2017 is calculated as

Gross Margin (Q: Jun. 2017 )=Gross Profit (Q: Jun. 2017 ) / Revenue (Q: Jun. 2017 )
=(Revenue - Cost of Goods Sold) / Revenue
=95 / 295.415
=32.08 %

* 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

J&J Snack Foods Corp had a gross margin of 32.08% for the quarter that ended in Jun. 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.

J&J Snack Foods Corp Annual Data

Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15Sep16
Gross_Profit 187187209228230250263288301304

J&J Snack Foods Corp Quarterly Data

Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17Jun17
Gross_Profit 67908264699280667395
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