Roots (TSX:ROOT) Gross Margin % : 58.59% (As of Jan. 2024)

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What is Roots Gross Margin %?

Gross Margin % is calculated as gross profit divided by its revenue. Roots's Gross Profit for the three months ended in Jan. 2024 was C$63.4 Mil. Roots's Revenue for the three months ended in Jan. 2024 was C$108.2 Mil. Therefore, Roots's Gross Margin % for the quarter that ended in Jan. 2024 was 58.59%.

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

TSX:ROOT' s Gross Margin % Range Over the Past 10 Years
Min: 36.82 Med: 57.29 Max: 59.47
Current: 58.04

During the past 9 years, the highest Gross Margin % of Roots was 59.47%. The lowest was 36.82%. And the median was 57.29%.

TSX:ROOT's Gross Margin % is ranked better than
83.2% of 1095 companies
in the Retail - Cyclical industry
Industry Median: 36.46 vs TSX:ROOT: 58.04

Roots had a gross margin of 58.59% for the quarter that ended in Jan. 2024 => Durable competitive advantage

The 5-Year average Growth Rate of Gross Margin for Roots was 0.90% per year.

Roots Gross Margin % Historical Data

The historical data trend for Roots'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.

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Roots Gross Margin % Chart

Roots Annual Data

Trend

Jan16

Jan17

Jan18

Jan19

Jan20

Jan21

Jan22

Jan23

Jan24

Gross Margin %

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53.41

58.10

59.47

57.69

58.04

Roots Quarterly Data
	Apr19	Jul19	Oct19	Jan20	Apr20	Jul20	Oct20	Jan21	Apr21	Jul21	Oct21	Jan22	Apr22	Jul22	Oct22	Jan23	Apr23	Jul23	Oct23	Jan24
Gross Margin %	Get a 7-Day Free Trial															56.51	59.00	55.54	58.42	58.59

Competitive Comparison of Roots's Gross Margin %

For the Apparel Retail subindustry, Roots'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.

Roots's Gross Margin % Distribution in the Retail - Cyclical Industry

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

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

Roots Gross Margin % Calculation

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

Roots's Gross Margin for the fiscal year that ended in Jan. 2024 is calculated as

Gross Margin % (A: Jan. 2024 )	=	Gross Profit (A: Jan. 2024 )	/	Revenue (A: Jan. 2024 )
	=	152.5	/	262.668
	=	(Revenue - Cost of Goods Sold)	/	Revenue
	=	(262.668 - 110.212)	/	262.668
	=	58.04 %

Roots's Gross Margin for the quarter that ended in Jan. 2024 is calculated as

Gross Margin % (Q: Jan. 2024 )	=	Gross Profit (Q: Jan. 2024 )	/	Revenue (Q: Jan. 2024 )
	=	63.4	/	108.234
	=	(Revenue - Cost of Goods Sold)	/	Revenue
	=	(108.234 - 44.818)	/	108.234
	=	58.59 %

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.

Roots (TSX:ROOT) 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

Roots had a gross margin of 58.59% for the quarter that ended in Jan. 2024 => Durable 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.

Roots Gross Margin % Related Terms

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Roots (TSX:ROOT) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » Roots Corp (TSX:ROOT) » Definitions » Gross Margin %

Comparable Companies

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RROTF:USA

Address

1400 Castlefield Avenue, Toronto, ON, CAN, M6B 4C4

Website

https://www.roots.com

Roots Corp provides a portfolio of apparel, leather goods, accessories, and footwear for men, women, and children under the Roots brand. Its merchandise includes genuine leather, such as jackets, bags, and luggage; kids & baby clothing; and leather, linens, towels, and accessories. The company operates through two segments: Direct-To-Consumer, which accounts for the majority of revenue, and Partners & Other. The DTC segment sells products through the company's corporate retail stores and e-commerce. The Partners & Other segment engage in the wholesale of Roots-branded products to the company's international operating partner, and it earns royalties on the retail sales of Roots-branded products. The company has operating stores in Canada, the United States, Taiwan, China, and Hong Kong.

Executives

Edward Hume Kernaghan

10% Security Holder