Gross Margin
Gross margin is the profit left after the cost of goods — net sales minus COGS, usually shown as a percentage of sales. It is the headline profitability number a merchandising plan is built to protect.
Gross margin is set at the buy (initial markup) and eroded in-season by markdowns, allowances, and returns. Most margin “misses” are not pricing failures — they are inventory failures that forced the markdowns.
Paired with inventory productivity, gross margin becomes GMROI, a fuller measure of how well inventory earns.
See also
RetailNorthstar puts these metrics where planning decisions happen — connected to one plan, live against actuals.
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