Gross Margin % is calculated as gross profit divided by its revenue. Stepan Co's Gross Profit for the
three
months ended in Dec. 2023 was $66 Mil. Stepan Co's Revenue for the
three
months ended in Dec. 2023 was $532 Mil. Therefore, Stepan Co's Gross Margin % for the quarter that ended in Dec. 2023 was 12.48%.
Warning Sign:
Stepan Co gross margin has been in long-term decline. The average rate of decline per year is -6.9%.
The historical rank and industry rank for Stepan Co's Gross Margin % or its related term are showing as below:
SCL'
s Gross Margin % Range Over the Past 10 Years
Min: 11.94 Med: 17.19 Max: 20.52
Current: 11.94
During the past 13 years, the highestGross Margin % of Stepan Co was 20.52%. The lowest was 11.94%. And the median was 17.19%.
SCL's Gross Margin % is ranked worse than 79.21% of 1510
companies
in the Chemicals industry
Industry Median: 22.31
vs SCL: 11.94
Stepan Co had a gross margin of 12.48% for the quarter that ended in Dec. 2023 => No sustainable competitive advantage
The 5-Year average Growth Rate of Gross Margin for Stepan Co was -6.90% per year.
Stepan Co Gross Margin % Historical Data
The historical data trend for Stepan Co'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.
Competitive Comparison of Stepan Co's Gross Margin %
For the Specialty Chemicals subindustry, Stepan Co'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.
Stepan Co's Gross Margin % Distribution in the Chemicals Industry
For the Chemicals industry and Basic Materials sector, Stepan Co's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Stepan Co's Gross Margin % falls into.
* 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.
Stepan Co (NYSE:SCL) 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
Stepan Co had a gross margin of 12.48% for the quarter that ended in Dec. 2023 => No sustainable competitive advantage
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.
Stepan Co Gross Margin % Related Terms
Thank you for viewing the detailed overview of Stepan Co's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
Stepan Co manufactures and sells a variety of chemicals and chemical-based products. The company organizes itself into three segments based on product type. The surfactants segment, which generates the majority of revenue, sells cleaning agents used in detergents, shampoos, body wash, fabric softeners, toothpastes, and other personal-care products. Surfactants are chemical agents that affect the interaction between two surfaces. The polymers segment sells polyurethane used to manufacture rigid foam for thermal insulation, as well as phthalic anhydride used to make plastic components for the construction, automotive, and boating industries. The specialty products segment sells chemicals used in food and flavoring. Most of Stepan's revenue comes from the United States.
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