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Safeway (FRA:SWY) Gross Margin % : 26.18% (As of Sep. 2014)


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What is Safeway Gross Margin %?

Gross Margin % is calculated as gross profit divided by its revenue. Safeway's Gross Profit for the three months ended in Sep. 2014 was €1,687 Mil. Safeway's Revenue for the three months ended in Sep. 2014 was €6,447 Mil. Therefore, Safeway's Gross Margin % for the quarter that ended in Sep. 2014 was 26.18%.

Warning Sign:

Safeway Inc gross margin has been in long term decline. The average rate of decline per year is -2%.


The historical rank and industry rank for Safeway's Gross Margin % or its related term are showing as below:

FRA:SWY' s Gross Margin % Range Over the Past 10 Years
Min: 26.12   Med: 29.2   Max: 31.57
Current: 26.12


During the past 13 years, the highest Gross Margin % of Safeway was 31.57%. The lowest was 26.12%. And the median was 29.20%.

FRA:SWY's Gross Margin % is not ranked
in the Retail - Defensive industry.
Industry Median: 23.17 vs FRA:SWY: 26.12

Safeway had a gross margin of 26.18% for the quarter that ended in Sep. 2014 => Competition eroding margins

The 5-Year average Growth Rate of Gross Margin for Safeway was -2.00% per year.


Safeway Gross Margin % Historical Data

The historical data trend for Safeway's Gross Margin % 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.

* Premium members only.

Safeway Gross Margin % Chart

Safeway Annual Data
Trend Dec04 Dec05 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13
Gross Margin %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 28.62 28.28 27.03 26.23 26.27

Safeway Quarterly Data
Dec09 Mar10 Jun10 Sep10 Dec10 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14
Gross Margin % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 25.86 26.31 26.15 25.75 26.18

Competitive Comparison of Safeway's Gross Margin %

For the Grocery Stores subindustry, Safeway's Gross Margin %, along with its competitors' market caps and Gross Margin % 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.


Safeway's Gross Margin % Distribution in the Retail - Defensive Industry

For the Retail - Defensive industry and Consumer Defensive sector, Safeway's Gross Margin % distribution charts can be found below:

* The bar in red indicates where Safeway's Gross Margin % falls into.


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Safeway Gross Margin % Calculation

Gross Margin is the percentage of Gross Profit out of sales or Revenue.

Safeway's Gross Margin for the fiscal year that ended in Dec. 2013 is calculated as

Gross Margin % (A: Dec. 2013 )=Gross Profit (A: Dec. 2013 ) / Revenue (A: Dec. 2013 )
=6930.6 / 26381.543
=(Revenue - Cost of Goods Sold) / Revenue
=(26381.543 - 19450.923) / 26381.543
=26.27 %

Safeway's Gross Margin for the quarter that ended in Sep. 2014 is calculated as


Gross Margin % (Q: Sep. 2014 )=Gross Profit (Q: Sep. 2014 ) / Revenue (Q: Sep. 2014 )
=1687.5 / 6446.93
=(Revenue - Cost of Goods Sold) / Revenue
=(6446.93 - 4759.44) / 6446.93
=26.18 %

* 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.


Safeway  (FRA:SWY) Gross Margin % 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

Safeway had a gross margin of 26.18% for the quarter that ended in Sep. 2014 => Competition eroding margins


Be Aware

If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.


Safeway Gross Margin % Related Terms

Thank you for viewing the detailed overview of Safeway's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.


Safeway Business Description

Traded in Other Exchanges
N/A
Address
Safeway Inc was incorporated in the state of Delaware in July 1986 as SSI Holdings Corporation and, thereafter, its name was changed to Safeway Stores, Incorporated. In February 1990, the Company changed its name to Safeway Inc. The Company is a food and drug retailers in the United States, with 1,335 stores at year-end 2013. The Company's U.S. retail operations are located principally in California, Hawaii, Oregon, Washington, Alaska, Colorado, Arizona, Texas and the Mid-Atlantic region. The Company also has a network of distribution, manufacturing and food-processing facilities. The Company retail business operates into seven geographic retail operating segments; Denver, Eastern, Northern California, Phoenix, Northwest, Texas and Southern California. In all geographical retail operating segments, it operates one store format, where each store offers the same general mix of products with similar pricing to similar categories of customers. The Company does not operate supercenters, warehouse formats, combination clothing/grocery stores or discount stores. It owns and operates GroceryWorks.com Operating Company, LLC ("GroceryWorks"), an online grocery channel doing business under the names Safeway.com and Vons.com. Safeway's stores provide grocery items tailored to local preferences. Its stores offer a selection of food and general merchandise and feature a variety of specialty departments such as bakery, delicatessen, floral and pharmacy. In addition, its stores offer Starbucks coffee shops and adjacent fuel centers. The Company also owns more than 300 other trademarks registered and/or pending in the United States Patent and Trademark Office and other jurisdictions, including trademarks for its product and services such as Safeway, Safeway SELECT, Rancher's Reserve, O Organics, Lucerne, Primo Taglio, Eating Right, mom to mom, waterfront BISTRO, Bright Green, Pantry Essentials, Open Nature, Refreshe, Snack Artist, Signature Café, Priority, just for U, My Simple Nutrition, Ingredients for Life, and other trademarks such as Pak'N Save Foods, Vons, Pavilions, Randalls, Tom Thumb, and Carrs Quality Centers. Blackhawk, a subsidiary of Safeway, provides third-party gift cards, prepaid cards, telecom cards and sports and entertainment cards to a group of top North American retailers for sale to retail customers. The competitive factors that affect the Company's business are location, quality, price, condition of assets, marketing and promotional strategies, service and consumer loyalty to other brands and stores. It faces intense competition from traditional grocery retailers, non-traditional competitors such as supercenters and club stores, as well as from specialty supermarkets, drug stores, dollar stores, convenience stores and restaurants. The Company's compliance with the federal, state, local and foreign laws and regulations have been adopted regulating the discharge of materials into the environment or otherwise related to the p

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