Gross Margin % is calculated as gross profit divided by its revenue. Reece's Gross Profit for the
six
months ended in Dec. 2023 was A$1,309 Mil. Reece's Revenue for the
six
months ended in Dec. 2023 was A$4,537 Mil. Therefore, Reece's Gross Margin % for the quarter that ended in Dec. 2023 was 28.85%.
Warning Sign:
Reece Ltd gross margin has been in long-term decline. The average rate of decline per year is -2.2%.
The historical rank and industry rank for Reece's Gross Margin % or its related term are showing as below:
ASX:REH'
s Gross Margin % Range Over the Past 10 Years
Min: 27.81 Med: 30.12 Max: 33.35
Current: 28.76
During the past 13 years, the highestGross Margin % of Reece was 33.35%. The lowest was 27.81%. And the median was 30.12%.
ASX:REH's Gross Margin % is ranked better than 62.24% of 143
companies
in the Industrial Distribution industry
Industry Median: 22.61
vs ASX:REH: 28.76
Reece had a gross margin of 28.85% for the quarter that ended in Dec. 2023 => Competition eroding margins
The 5-Year average Growth Rate of Gross Margin for Reece was -2.20% per year.
Reece Gross Margin % Historical Data
The historical data trend for Reece'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.
For the Industrial Distribution subindustry, Reece'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.
Reece's Gross Margin % Distribution in the Industrial Distribution Industry
For the Industrial Distribution industry and Industrials sector, Reece's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Reece'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.
Reece (ASX:REH) 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
Reece had a gross margin of 28.85% 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.
Reece Gross Margin % Related Terms
Thank you for viewing the detailed overview of Reece's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
Reece is an Australian distributor of plumbing supplies and bathroom products, with businesses in Australia, New Zealand, and the United States. Reece Australia holds Australia's largest range of individual plumbing stock-keeping units, supporting plumbing needs for general plumbing, bathrooms, kitchens, heating and air conditioning, irrigation, pools, commercial and government projects, and fire services.In the Australia and New Zealand markets, Reece's professional, or trade, customers are mostly small to medium plumbing businesses working in the areas of residential repairs, renovations, or new home builds.The U.S. business principally serves plumbers working on commercial and residential construction projects and has a network of almost 250 stores in the southern Sun Belt states.
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