Sonic's gross profit for the
three
months ended in Aug. 2018 was $26.8 Mil. Sonic's gross profit for the trailing twelve months (TTM) ended in Aug. 2018 was $195.5 Mil.
Gross Margin % is calculated as gross profit divided by its revenue. Sonic's gross profit for the
three
months ended in Aug. 2018 was $26.8 Mil. Sonic's Revenue for the
three
months ended in Aug. 2018 was $111.8 Mil. Therefore, Sonic's Gross Margin % for the quarter that ended in Aug. 2018 was 23.95%.
Sonic had a gross margin of 23.95% for the quarter that ended in Aug. 2018 => Competition eroding margins
Sonic Gross Profit Historical Data
The historical data trend for Sonic's Gross Profit can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Restaurants subindustry, Sonic's Gross Profit, along with its competitors' market caps and Gross Profit data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Sonic's Gross Profit Distribution in the Restaurants Industry
For the Restaurants industry and Consumer Cyclical sector, Sonic's Gross Profit distribution charts can be found below:
* The bar in red indicates where Sonic's Gross Profit falls into.
Sonic Gross Profit Calculation
Gross Profit is the different between the sale prices and the cost of buying or producing the goods.
Sonic's Gross Profit for the fiscal year that ended in Aug. 2018 is calculated as
Gross Profit for the trailing twelve months (TTM) ended in Aug. 2018 adds up the quarterly data reported by the company within the most recent 12 months, which was $195.5 Mil.
Gross Profit is the numerator in the calculation of Gross Margin.
Sonic's Gross Margin % for the quarter that ended in Aug. 2018 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange 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.
Sonic (NAS:SONC) Gross Profit 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
Sonic had a gross margin of 23.95% for the quarter that ended in Aug. 2018 => Competition eroding margins
Sonic Gross Profit Related Terms
Thank you for viewing the detailed overview of Sonic's Gross Profit provided by GuruFocus.com. Please click on the following links to see related term pages.
Sonic Corp operates and franchises drive-in restaurants throughout the United States. The restaurants typically consist of a building that houses only a kitchen to go along with 16 to 24 parking spaces that have their own payment terminals, intercom speakers, and menu boards. Carhops serve customers in their cars. Many locations also have a drive-thru lane and patio seating as alternatives. Sonic franchises roughly 90% of its restaurants, and the royalty revenue the company earns on franchise sales contributes roughly a quarter of total company revenue. Company-operated stores provide the balance of total revenue. Sonic owns the property on which hundreds of its restaurants are located. For those properties that house franchised stores, franchisees lease from the company.
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