Gross Margin % is calculated as gross profit divided by its revenue. Lamb Weston Holdings's Gross Profit for the
three
months ended in Feb. 2024 was $404 Mil. Lamb Weston Holdings's Revenue for the
three
months ended in Feb. 2024 was $1,458 Mil. Therefore, Lamb Weston Holdings's Gross Margin % for the quarter that ended in Feb. 2024 was 27.68%.
Warning Sign:
Lamb Weston Holdings Inc gross margin has been in long-term decline. The average rate of decline per year is -1.9%.
The historical rank and industry rank for Lamb Weston Holdings's Gross Margin % or its related term are showing as below:
LW'
s Gross Margin % Range Over the Past 10 Years
Min: 20.08 Med: 23.14 Max: 26.84
Current: 26.84
During the past 10 years, the highestGross Margin % of Lamb Weston Holdings was 26.84%. The lowest was 20.08%. And the median was 23.14%.
LW's Gross Margin % is ranked better than 54.59% of 1808
companies
in the Consumer Packaged Goods industry
Industry Median: 25.04
vs LW: 26.84
Lamb Weston Holdings had a gross margin of 27.68% for the quarter that ended in Feb. 2024 => Competition eroding margins
The 5-Year average Growth Rate of Gross Margin for Lamb Weston Holdings was -1.90% per year.
Lamb Weston Holdings Gross Margin % Historical Data
The historical data trend for Lamb Weston Holdings'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 Lamb Weston Holdings's Gross Margin %
For the Packaged Foods subindustry, Lamb Weston Holdings'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.
Lamb Weston Holdings's Gross Margin % Distribution in the Consumer Packaged Goods Industry
For the Consumer Packaged Goods industry and Consumer Defensive sector, Lamb Weston Holdings's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Lamb Weston Holdings'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.
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
Lamb Weston Holdings had a gross margin of 27.68% for the quarter that ended in Feb. 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.
Lamb Weston Holdings Gross Margin % Related Terms
Thank you for viewing the detailed overview of Lamb Weston Holdings's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.
Lamb Weston Holdings (Lamb Weston Holdings) Business Description
Lamb Weston is North America's largest and the world's second-largest producer of branded and private-label frozen potato products, both by volume and value. The company's portfolio is anchored by French fries, but it also sells sweet potato fries, tater tots, diced potatoes, mashed potatoes, hash browns, and chips. Nearly 70% of revenue comes from its home market of North America, with none of the other 100 countries the company sells into representing a significant share. McDonald's is Lamb Weston's single largest customer at 13% of fiscal 2023 sales, with no other company representing more than 10%. Lamb Weston became an independent company in 2016 when it was spun off from Conagra.
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