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Gross Margin % is calculated as gross profit divided by its revenue. Advance Auto Parts's Gross Profit for the three months ended in Dec. 2023 was $921 Mil. Advance Auto Parts's Revenue for the three months ended in Dec. 2023 was $2,465 Mil. Therefore, Advance Auto Parts's Gross Margin % for the quarter that ended in Dec. 2023 was 37.36%.
Warning Sign:
Advance Auto Parts Inc gross margin has been in long-term decline. The average rate of decline per year is -1.2%.
The historical rank and industry rank for Advance Auto Parts's Gross Margin % or its related term are showing as below:
During the past 13 years, the highest Gross Margin % of Advance Auto Parts was 45.42%. The lowest was 40.07%. And the median was 44.28%.
Advance Auto Parts had a gross margin of 37.36% for the quarter that ended in Dec. 2023 => Competition eroding margins
The 5-Year average Growth Rate of Gross Margin for Advance Auto Parts was -1.20% per year.
The historical data trend for Advance Auto Parts'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.
Advance Auto Parts Annual Data | |||||||||||||||||||||
Trend | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||||
Gross Margin % | Get a 7-Day Free Trial | 43.82 | 44.34 | 44.77 | 44.22 | 40.07 |
Advance Auto Parts Quarterly Data | ||||||||||||||||||||
Mar19 | Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | |
Gross Margin % | Get a 7-Day Free Trial | 43.35 | 43.03 | 42.74 | 36.29 | 37.36 |
For the Specialty Retail subindustry, Advance Auto Parts'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.
For the Retail - Cyclical industry and Consumer Cyclical sector, Advance Auto Parts's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Advance Auto Parts's Gross Margin % falls into.
Gross Margin is the percentage of Gross Profit out of sales or Revenue.
Advance Auto Parts's Gross Margin for the fiscal year that ended in Dec. 2023 is calculated as
Gross Margin % (A: Dec. 2023 ) | = | Gross Profit (A: Dec. 2023 ) | / | Revenue (A: Dec. 2023 ) |
= | 4523.5 | / | 11287.607 | |
= | (Revenue - Cost of Goods Sold) | / | Revenue | |
= | (11287.607 - 6764.105) | / | 11287.607 | |
= | 40.07 % |
Advance Auto Parts's Gross Margin for the quarter that ended in Dec. 2023 is calculated as
Gross Margin % (Q: Dec. 2023 ) | = | Gross Profit (Q: Dec. 2023 ) | / | Revenue (Q: Dec. 2023 ) |
= | 921 | / | 2464.869 | |
= | (Revenue - Cost of Goods Sold) | / | Revenue | |
= | (2464.869 - 1543.905) | / | 2464.869 | |
= | 37.36 % |
* 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.
Advance Auto Parts (NYSE:AAP) 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
Advance Auto Parts had a gross margin of 37.36% for the quarter that ended in Dec. 2023 => 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.
Thank you for viewing the detailed overview of Advance Auto Parts's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
Kristen L Soler | officer: EVP, Chief HR Officer | 12200 FOX VALLEY STREET, RALEIGH NC 27614 |
Lee Eugene I Jr | director | 1000 DARDEN CENTER DRIVE, ORLANDO FL 32837 |
Shane M Okelly | director, officer: Director, President and CEO | 4200 SIX FORKS ROAD, RALEIGH NC 27609 |
Anthony A Iskander | officer: Interim CFO, SVP, Fin & Treas | 4200 SIX FORKS ROAD, RALEIGH NC 27609 |
Douglas A Pertz | director | 1801 BAYBERRY COURT, RICHMOND VA 23226 |
Joan M Hilson | director | 150 THORN HILL DRIVE, WARRENDALE PA 15086-7528 |
John Francis Ferraro | director | 9 WALNUT AVE, CAMBRIDGE MA 02140 |
Carla Jean Bailo | director | 1775 SHERMAN STREET, SUITE 1200, DENVER CO 80203 |
Jones Jeffrey J Ii | director | ONE H&R BLOCK WAY, KANSAS CITY MO 64105 |
Szilagyi J Stephen | officer: EVP Chief Supply Chain Officer | 15027 JUNE WASHAM ROAD, RALEIGH NC 27609 |
Word Herman L Jr | officer: EVP, U.S. Stores & CQ Ind. | 1033 LINENHALL WAY, WAKE FOREST NC 27587 |
Pellicciotti William J Jr | officer: SVP, Controller and CAO | 4200 SIX FORKS ROAD, RALEIGH NC 27609 |
Robert B Cushing | officer: EVP, Commercial | 1432 FREEMAN LANE, PLEASANTON VA 94566 |
Sherice Torres | director | PO BOX 20833, SAN JOSE CA 95160 |
Natalie Schechtman | officer: SVP Human Resources | 45 ROUND HOUSE ROAD, BEDFORD NY 10506 |
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