Thanks for the reply, but you didn't actually answer my question. You commented on something that I wasn't seeking a reply to.
I would classify JAT as a manufacturer and wholesaler. We don't have a retail store, so we are not a retailer. Even if we had 1 store we wouldn't be classed as a retailer. The store concept is a marketing tool. Nothing else.
But to respond to
your comments, have a look at
A2M's P&L from last year. It has made a Gross margin of 54.72 % (713752 / 1304336).
They don't have retail stores and sell thru established retailers in Australia, and thru distributors/wholesalers in overseas markets.
A/NZ revenue is 64.6% (842695 / 1304336)
Chinese/Asian revenue is 31.1% from total (405667 / 1304336).
All of these sales for A2M are wholesale. If A2M had their own retails stories they would claim the retail margin. The type of product they have and the small range they offer does not allow them to have their own stores.
Before I get the whole A2M is not JAT crap, this is not the point you need to focus on. I am pointing out that an FMCG company (A2M) can earn over 50% gross margin and not make 1 retail sale itself. If everyone is saying our brands are that strong them why aren't we making the same margin?
What GP do you think JAT will make this year? it's basically had ANMA for most of the year, so we can get a pretty good guide as to real margins being made at wholesale level, like A2M is.
Our half year account showed GM % of 23.83% (7299261 / 30619001)If we make $80m sales and had gross margin of 23.83% ($19,064,000) less annualised costs (excl write of that old chestnut GK of $2.5m), $13,500,932 we could have an EBIT of $5.563m.
If we doubled our GM to 46% $38,128,000 we would have an EBIT of $24.6m.
So why is our margin so much lower than A2M?I come back to my original unanswered question, how is the "final mile" profits chopped up in China, once JAT has sold it? I'm thinking the online platform makes some money as does the distributor in China who buys the product from JAT.
I'd be disappointed if our GM is less than 30% for the year. I'm suggesting the GM % for any IF/FMCG business is a function of how strong the brand is. Can't wait to see where JAT is AT in this full year.
(20min delay)