Originally Posted by
ijgordon
But they aree. Read their 10K. If you want to get pedantic many of them are semi-fixed (like the rent or depreciation on the distribution center) in that they won’t change whether they sell you that pair of yoga pants or not. The gross margin as disclosed is not the same as the merchandise margin (which is not disclosed).
It depends on what you define as "fixed costs." Here's what the 10K says.
Cost of goods sold includes:
• the cost of purchased merchandise, which includes acquision and producon costs including raw material and labor, as applicable;
• the cost incurred to deliver inventory to the Company's distribuon centers including freight, non-refundable taxes, duty, and other landing costs;
• the cost of the Company's distribuon centers, such as labor, rent, ulies, and depreciaon;
• the cost of the Company's producon, design, research and development, distribuon, and merchandising departments including salaries, stock- based compensaon and benefits, and other expenses;
• occupancy costs such as minimum rent, conngent rent where applicable, property taxes, ulies, and depreciaon expense for the Company's company-operated store locaons;
• hemming costs;
• shrink and inventory provision expense; and
• the cost of digital content subscripon services
This is contrasted with selling, general and administrative expenses, which are not included in the gross margin calculation:
Selling, general and administrave expenses consist of all operang costs not otherwise included in cost of goods sold, intangible asset amorzaon, or acquision-related expenses. The Company's selling, general and administrave expenses include the costs of corporate and retail employee wages and benefits, costs to transport the Company's products from the distribuon facilies to the Company's retail locaons and e-commerce guests, professional fees, markeng, technology, human resources, accounng, legal, corporate facility and occupancy costs, and depreciaon and amorzaon expense other than in cost of goods sold.