decline in gross margin

USAGE SUMMARY

The phrase "decline in gross margin" is correct and usable in written English.
It can be used in financial or business contexts to describe a decrease in the difference between sales revenue and the cost of goods sold. Example: "The company reported a significant decline in gross margin this quarter, raising concerns among investors."

✓ Grammatically correct

News & Media

Science

Formal & Business

Human-verified examples from authoritative sources

Exact Expressions

4 human-written examples

A decline in gross margin can show that a company's revenue is falling faster than its costs.

The New York Times

While this pattern is familiar, the company said the sheer magnitude of its product-line overhaul made the decline in gross margin more severe.

The New York Times - Tech

"The company met consensus estimates for revenue but fell below [earnings per share] consensus estimates, driven by a decline in gross margin," says Clardy.

Forbes

Anticipated decline in gross margin, increased competition from over 500 sites worldwide that are similar to Groupon, including LivingSocial (Amazon invested $175M), and Google Offers which is in beta.

Forbes

Human-verified similar examples from authoritative sources

Similar Expressions

56 human-written examples

[But] CPW Europe has seen a 500 basis points decline in gross margins over the last five years.

The Guardian - Business

Amazon's free shipping program also contributed to a decline in gross margins for the third quarter, from 28.4percentto27.4percentcent, which also resulted from a change in the revenue mix toward lower-margin products, Mr. Bezos said.

The New York Times - Tech

Gateway said it might see a decline in gross margins as a result of the price cuts, but reiterated its forecast of break-even earnings for the first half of 2001.

The New York Times

Investors should be extremely wary of companies that are experiencing a decline in gross margins (either sequentially or year-over-year).

Forbes

The good news may be overshadowed by accompanying news that Dell sees a modest decline in gross margins for the period.

Forbes

For investors, however, perhaps the best news came in gross margin, which improved to 52.4percentt after declining to 46.9percentt in the second quarter.

The New York Times

Dec. 23: TPG dropped out from the bidding process, citing "concerns about the negative trends in gross margin and earnings in the PC business and the decline in the company's operating performance, including the decline in its operating margins".

The New York Times

Expert writing Tips

Best practice

When discussing a "decline in gross margin", provide specific context about the period being analyzed (e.g. "quarterly", "year-over-year") and potential contributing factors (e.g. "increased costs", "lower sales prices").

Common error

Avoid using "decline in gross margin" interchangeably with declines in net profit margin or operating margin. Gross margin specifically refers to revenue minus the cost of goods sold, and a decline in this metric has specific implications distinct from overall profitability or operational efficiency.

Linguistic Context

The phrase "decline in gross margin" functions as a noun phrase indicating a decrease in a company's profitability. This is evidenced by Ludwig's examples which show it being used to describe specific instances in company financial reports and analyses.

Expression frequency: Uncommon

Frequent in

News & Media

50%

Science

25%

Formal & Business

25%

Less common in

Academia

0%

Encyclopedias

0%

Wiki

0%

Ludwig's WRAP-UP

The phrase "decline in gross margin" is a noun phrase used to describe a decrease in a company's gross profit margin. Ludwig's analysis shows it's grammatically correct and most commonly found in news and media, as well as in formal business contexts. While straightforward in meaning, it's important to use it accurately and in context, providing specifics about the period and potential causes for the decline. Be sure to distinguish it from other financial metrics like net profit margin. Related phrases include "decrease in gross margin" and "reduction in gross margin".

More alternative expressions

Phrases that express similar concepts, ordered by semantic similarity:

decrease in gross margin

Replaces "decline" with the synonym "decrease", maintaining the same meaning and grammatical structure.

reduction in gross margin

Substitutes "decline" with "reduction", indicating a decrease in gross margin.

fall in gross margin

Replaces "decline" with "fall", a simple and direct synonym.

drop in gross margin

Uses the more informal "drop" to indicate a decrease.

gross margin decrease

Rearranges the phrase to place "gross margin" first, emphasizing the subject.

gross margin contraction

Uses "contraction" to describe a shrinking of the gross margin.

erosion of gross margin

Uses "erosion" to suggest a gradual decline, adding a sense of progressive loss.

worsening gross margin

Emphasizes the negative impact of the decline, focusing on the deteriorating state of the margin.

deterioration of gross margin

Similar to "worsening", but with a more formal tone.

impairment of gross margin

Indicates damage or weakening of the gross margin, suggesting a significant negative impact.

FAQs

What does a "decline in gross margin" indicate about a company's performance?

A "decline in gross margin" typically suggests that a company is becoming less efficient in its production process or is facing pricing pressures. It could mean the cost of goods sold is increasing at a faster rate than revenue, or that the company is lowering prices to remain competitive.

What are some common causes of a "decline in gross margin"?

Common causes include increased raw material costs, higher labor expenses, changes in product mix towards lower-margin items, increased competition leading to lower selling prices, and inefficiencies in production or supply chain management.

How does a "decline in gross margin" affect investors?

A "decline in gross margin" can signal potential problems with a company's profitability and efficiency, potentially leading to lower earnings and a decrease in investor confidence. Investors often view this as a negative sign, which can lead to a drop in the company's stock price.

What are some alternative phrases for "decline in gross margin"?

You can use alternatives like "decrease in gross margin", "reduction in gross margin", or "erosion of gross margin" to express the same concept with slightly different nuances.