Valvoline Inc (VVV)
Gross profit margin
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Gross profit | US$ in thousands | 544,500 | 476,400 | 432,300 | 301,000 | 810,000 |
| Revenue | US$ in thousands | 1,440,900 | 1,232,700 | 2,945,000 | 2,375,000 | 2,390,000 |
| Gross profit margin | 37.79% | 38.65% | 14.68% | 12.67% | 33.89% |
September 30, 2023 calculation
Gross profit margin = Gross profit ÷ Revenue
= $544,500K ÷ $1,440,900K
= 37.79%
The gross profit margin of Valvoline Inc has shown some fluctuation over the past five years. The gross profit margin for the fiscal year ending September 30, 2023, was 37.72%, a decrease from the previous year's margin of 38.54%. This decline suggests a slight decrease in the company's ability to generate profit from its core operations, as the percentage of revenue remaining after accounting for the cost of goods sold has decreased.
Comparing this performance to the previous three fiscal years, it is evident that the gross profit margin has displayed significant variability. In fiscal year 2021, the gross profit margin was 32.87%, representing a lower level of profitability compared to the most recent fiscal year. However, in fiscal year 2020, Valvoline Inc achieved a gross profit margin of 36.68%, which was higher than both 2021 and 2023. Furthermore, in fiscal year 2019, the gross profit margin was 33.89%.
The fluctuation in the gross profit margin over the years indicates potential shifts in the cost of goods sold and the company's pricing strategy, as well as changes in the competitive landscape and customer preferences. It is essential for Valvoline Inc to closely monitor and manage its cost structure while striving to maintain pricing power to ensure sustainable and consistent profitability.
The declining trend in the gross profit margin from 2022 to 2023 warrants further investigation to identify the root cause and implement necessary measures to sustain or improve profitability. Additionally, management should focus on enhancing operational efficiency, optimizing pricing strategies, and scrutinizing cost controls to safeguard and enhance the gross profit margin in the future.
Peer comparison
Sep 30, 2023