0.24(0.53%) Volume: 314,292 10:09PM EDT| Market Cap : 7.6 B | Enterprise Value : 7.72 B | P/E (TTM) : 22.87 | P/B : 8.10 |
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Graco's gross profit for the three months ended in Jun. 2019 was $227 Mil. Graco's gross profit for the trailing twelve months (TTM) ended in Jun. 2019 was $873 Mil.
Gross Margin % is calculated as gross profit divided by its revenue. Graco's gross profit for the three months ended in Jun. 2019 was $227 Mil. Graco's Revenue for the three months ended in Jun. 2019 was $428 Mil. Therefore, Graco's Gross Margin % for the quarter that ended in Jun. 2019 was 52.99%.
Graco had a gross margin of 52.99% for the quarter that ended in Jun. 2019 => Durable competitive advantage
During the past 13 years, the highest Gross Margin % of Graco was 55.87%. The lowest was 50.55%. And the median was 54.07%.
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
| Graco Quarterly Data | ||||||||||||||||||||
| Sep14 | Dec14 | Mar15 | Jun15 | Sep15 | Dec15 | Mar16 | Jun16 | Sep16 | Dec16 | Mar17 | Jun17 | Sep17 | Dec17 | Mar18 | Jun18 | Sep18 | Dec18 | Mar19 | Jun19 | |
| Gross Profit |
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229.90 | 221.46 | 208.76 | 216.04 | 226.95 |
* The bar in red indicates where Graco's Gross Profit falls into.
Gross Profit is the different between the sale prices and the cost of buying or producing the goods.
Graco's Gross Profit for the fiscal year that ended in Dec. 2018 is calculated as
| Gross Profit (A: Dec. 2018 ) | = | Revenue | - | Cost of Goods Sold |
| = | 1653.292 | - | 770.753 | |
| = | 883 |
Graco's Gross Profit for the quarter that ended in Jun. 2019 is calculated as
| Gross Profit (Q: Jun. 2019 ) | = | Revenue | - | Cost of Goods Sold |
| = | 428.328 | - | 201.374 | |
| = | 227 |
Gross Profit for the trailing twelve months (TTM) ended in Jun. 2019 was 221.459 (Sep. 2018 ) + 208.756 (Dec. 2018 ) + 216.042 (Mar. 2019 ) + 226.954 (Jun. 2019 ) = $873 Mil.
Gross Profit is the numerator in the calculation of Gross Margin:
Graco's Gross Margin % for the quarter that ended in Jun. 2019 is calculated as
| Gross Margin % (Q: Jun. 2019 ) | = | Gross Profit (Q: Jun. 2019 ) | / | Revenue (Q: Jun. 2019 ) |
| = | (Revenue - Cost of Goods Sold) | / | Revenue | |
| = | 227 | / | 428.328 | |
| = | 52.99 % |
* 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.
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
Graco had a gross margin of 52.99% for the quarter that ended in Jun. 2019 => Durable competitive advantage
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