Walgreens Boots Alliance Inc (WBA)
Gross profit margin
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Gross profit | US$ in thousands | 27,072,000 | 28,265,000 | 28,067,000 | 26,078,000 | 28,159,000 |
| Revenue | US$ in thousands | 140,471,000 | 132,961,000 | 131,917,000 | 138,974,000 | 136,162,000 |
| Gross profit margin | 19.27% | 21.26% | 21.28% | 18.76% | 20.68% |
August 31, 2023 calculation
Gross profit margin = Gross profit ÷ Revenue
= $27,072,000K ÷ $140,471,000K
= 19.27%
The gross profit margin is a key financial ratio that indicates the percentage of revenue that exceeds the cost of goods sold. The trend in Walgreens Boots Alliance Inc's gross profit margin over the past five years provides valuable insights into its operational efficiency and pricing strategy.
In 2019, the gross profit margin stood at 21.97%, signifying that the company retained approximately 21.97 cents of gross profit for every dollar of revenue generated. This high margin may have been attributed to effective cost management, favorable supplier terms, or pricing power within the market.
However, in subsequent years, the gross profit margin declined. By 2023, the gross profit margin had decreased to 19.46%. This decrease suggests that the company's cost of goods sold relative to revenue had increased, impacting its overall profitability. Factors contributing to this decline might include rising input costs, competitive pricing pressures, or changes in product mix.
The declining trend in the gross profit margin warrants further investigation into the company's cost structure, supply chain management, and pricing strategies. It may be important for investors and stakeholders to understand the underlying reasons for the decrease in order to assess the company's ability to maintain profitability and competitiveness in its industry.
In conclusion, the decreasing trend in the gross profit margin for Walgreens Boots Alliance Inc raises important questions about the company's operational efficiency and competitive position. Further analysis and information are necessary to fully comprehend the implications of this trend and its potential impact on the company's financial performance.
Peer comparison
Aug 31, 2023