Market Cap : 1.91 B | Enterprise Value : 1.88 B | PE Ratio : 27.14 | PB Ratio : 2.48 |
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La-Z-Boy's gross profit for the three months ended in Jan. 2021 was $201 Mil. La-Z-Boy's gross profit for the trailing twelve months (TTM) ended in Jan. 2021 was $690 Mil.
Gross Margin % is calculated as gross profit divided by its revenue. La-Z-Boy's gross profit for the three months ended in Jan. 2021 was $201 Mil. La-Z-Boy's Revenue for the three months ended in Jan. 2021 was $470 Mil. Therefore, La-Z-Boy's Gross Margin % for the quarter that ended in Jan. 2021 was 42.80%.
La-Z-Boy had a gross margin of 42.80% for the quarter that ended in Jan. 2021 => Durable competitive advantage
During the past 13 years, the highest Gross Margin % of La-Z-Boy was 42.34%. The lowest was 29.85%. And the median was 36.87%.
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
* The bar in red indicates where La-Z-Boy's Gross Profit falls into.
Gross Profit is the different between the sale prices and the cost of buying or producing the goods.
La-Z-Boy's Gross Profit for the fiscal year that ended in Apr. 2020 is calculated as
Gross Profit (A: Apr. 2020 ) | = | Revenue | - | Cost of Goods Sold |
= | 1703.982 | - | 982.537 | |
= | 721 |
La-Z-Boy's Gross Profit for the quarter that ended in Jan. 2021 is calculated as
Gross Profit (Q: Jan. 2021 ) | = | Revenue | - | Cost of Goods Sold |
= | 470.196 | - | 268.944 | |
= | 201 |
Gross Profit for the trailing twelve months (TTM) ended in Jan. 2021 was 171.706 (Apr. 2020 ) + 116.363 (Jul. 2020 ) + 200.555 (Oct. 2020 ) + 201.252 (Jan. 2021 ) = $690 Mil.
Gross Profit is the numerator in the calculation of Gross Margin.
La-Z-Boy's Gross Margin % for the quarter that ended in Jan. 2021 is calculated as
Gross Margin % (Q: Jan. 2021 ) | = | Gross Profit (Q: Jan. 2021 ) | / | Revenue (Q: Jan. 2021 ) |
= | (Revenue - Cost of Goods Sold) | / | Revenue | |
= | 201 | / | 470.196 | |
= | 42.80 % |
* 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
La-Z-Boy had a gross margin of 42.80% for the quarter that ended in Jan. 2021 => Durable competitive advantage
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