Gross Margin % is calculated as gross profit divided by its revenue. Hexcel's Gross Profit for the
three
months ended in Mar. 2024 was $118 Mil. Hexcel's Revenue for the
three
months ended in Mar. 2024 was $472 Mil. Therefore, Hexcel's Gross Margin % for the quarter that ended in Mar. 2024 was 25.03%.
Warning Sign:
Hexcel Corp gross margin has been in long-term decline. The average rate of decline per year is -2.4%.
The historical rank and industry rank for Hexcel's Gross Margin % or its related term are showing as below:
HXL'
s Gross Margin % Range Over the Past 10 Years
Min: 15.95 Med: 26.86 Max: 28.63
Current: 23.49
During the past 13 years, the highestGross Margin % of Hexcel was 28.63%. The lowest was 15.95%. And the median was 26.86%.
HXL's Gross Margin % is ranked worse than 56.08% of 296
companies
in the Aerospace & Defense industry
Industry Median: 26.235
vs HXL: 23.49
Hexcel had a gross margin of 25.03% for the quarter that ended in Mar. 2024 => Competition eroding margins
The 5-Year average Growth Rate of Gross Margin for Hexcel was -2.40% per year.
Hexcel Gross Margin % Historical Data
The historical data trend for Hexcel'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 Aerospace & Defense subindustry, Hexcel'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.
Hexcel's Gross Margin % Distribution in the Aerospace & Defense Industry
For the Aerospace & Defense industry and Industrials sector, Hexcel's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Hexcel'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.
Hexcel (NYSE:HXL) 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
Hexcel had a gross margin of 25.03% for the quarter that ended in Mar. 2024 => 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.
Hexcel Gross Margin % Related Terms
Thank you for viewing the detailed overview of Hexcel's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
Founded in 1948, Hexcel designs and manufactures a range of high-performance composite fibers, fabrics, resins, and structures for use in commercial aerospace, defense, and other industrial markets. These are engineered to be lighter than metal and perform under rigorous conditions in aircraft frames, wings, engines, and other components and subassemblies. The company's name derives from the six-sided honeycomb structures that lend many of its products their light weight and rigidity. Hexcel's biggest customers are Airbus (38% of 2022 sales) and Boeing (25% of prepandemic sales) and its respective subcontractors.
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