Johnson & Johnson stock research
FY2023 Q2
Johnson & Johnson (JNJ) Gross Margin — Quarter Ended Jul 2, 2023
Revenue increased from the prior quarter but declined from the same quarter last year. Gross profit followed a similar pattern, while cost of revenue decreased both sequentially and year over year, resulting in an improved gross margin in both comparisons.
Gross margin takeaway
Quarter ended Jul 2, 2023 · FY2023 Q2
Revenue increased from the prior quarter but declined from the same quarter last year. Gross profit followed a similar pattern, while cost of revenue decreased both sequentially and year over year, resulting in an improved gross margin in both comparisons.
- The most observable driver of the margin improvement is the decline in cost of revenue relative to revenue, as cost of revenue decreased while revenue increased sequentially and fell less sharply year over year.
- Compared with the prior quarter, revenue and gross profit were higher, cost of revenue was lower, and gross margin improved. Compared with the same quarter last year, revenue and gross profit were lower, cost of revenue was lower, and gross margin improved.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
70.0%
Gross profit
$15.1B
Revenue
$21.5B
Cost of revenue
$6.5B
Quarter-over-quarter change
+2.0 pts
Year-over-year change
+4.4 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Apr 2, 2023 | $20.9B | $14.2B | $6.7B | 68.0% |
| Jul 2, 2023 | $21.5B | $15.1B | $6.5B | 70.0% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Apr 2, 2023
+2.0 pts
Year-over-year change
Jul 3, 2022
+4.4 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The most observable driver of the margin improvement is the decline in cost of revenue relative to revenue, as cost of revenue decreased while revenue increased sequentially and fell less sharply year over year.
Compared with the prior quarter, revenue and gross profit were higher, cost of revenue was lower, and gross margin improved. Compared with the same quarter last year, revenue and gross profit were lower, cost of revenue was lower, and gross margin improved.
Monitor inventory levels as discussed in the liquidity section of the filing, as changes in inventory could influence future cost of revenue.