Gross Margin % is calculated as gross profit divided by its revenue. Aramark's Gross Profit for the
three
months ended in Dec. 2023 was $363 Mil. Aramark's Revenue for the
three
months ended in Dec. 2023 was $4,408 Mil. Therefore, Aramark's Gross Margin % for the quarter that ended in Dec. 2023 was 8.23%.
Warning Sign:
Aramark 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 Aramark's Gross Margin % or its related term are showing as below:
ARMK'
s Gross Margin % Range Over the Past 10 Years
Min: 6.52 Med: 10.01 Max: 11.35
Current: 9.32
During the past 13 years, the highestGross Margin % of Aramark was 11.35%. The lowest was 6.52%. And the median was 10.01%.
ARMK's Gross Margin % is ranked worse than 92.94% of 992
companies
in the Business Services industry
Industry Median: 34.725
vs ARMK: 9.32
Aramark had a gross margin of 8.23% for the quarter that ended in Dec. 2023 => No sustainable competitive advantage
The 5-Year average Growth Rate of Gross Margin for Aramark was -2.20% per year.
Aramark Gross Margin % Historical Data
The historical data trend for Aramark'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 Aramark's Gross Margin %
For the Specialty Business Services subindustry, Aramark'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.
Aramark's Gross Margin % Distribution in the Business Services Industry
For the Business Services industry and Industrials sector, Aramark's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Aramark'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.
Aramark (NYSE:ARMK) 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
Aramark had a gross margin of 8.23% 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.
Aramark Gross Margin % Related Terms
Thank you for viewing the detailed overview of Aramark's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
Aramark provides food, facilities, and uniform services to a variety of clients and institutions. The majority of company revenue comes from its North American food and support services segment. Smaller but substantial segments include food and support services international, food and support services united states and uniform and career apparel. The food and support services segments provide food for school districts; colleges; healthcare facilities; correctional institutions; and business, sports, and entertainment venues. The uniform segment rents, delivers, cleans, and maintains work clothes and ancillary items like towels and mats to customers in North America and Japan. The company has hundreds of service locations and distribution centers across the United States and Canada.
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