LUVNEUTRAL

LUV Gross Margin Analysis

16.4%

Updated 33h ago·SEC filings & market data

Key Takeaway

Gross margin is the share of revenue left after paying direct production costs, so 16.4% means LUV keeps $0.164 of every sales dollar before other expenses.

Sector Performance

7th percentile

LUV

16.4%

Sector Median

46.6%

Sector Avg

47.6%

Prior Period

18.9%(Jul 2026)

↓ Declining

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Deep Analysis

Gross margin is the share of revenue left after paying direct production costs, so 16.4% means LUV keeps $0.164 of every sales dollar before other expenses.

That level is far below the sector median of 46.4%, placing LUV in the 8th percentile among peers. The year-over-year change is not available, but the quarter-over-quarter decline of -13.2% shows recent erosion, with the metric falling from 18.9% to 16.4%. A low margin combined with a sharp quarterly drop points to higher investment risk, as LUV has limited buffer against rising costs or pricing pressure. This cautionary signal does not override the overall NEUTRAL verdict, but it does not support a bullish case either. The metric aligns with a neutral stance because it flags a real weakness while the missing YoY data prevents calling the trend definitive.

Frequently Asked Questions

What does the Gross Margin tell investors about LUV?

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.

How is the Gross Margin calculated?

Gross Margin is calculated as: Gross Profit / Revenue.

Who are LUV's closest peers by Gross Margin?

The closest peers by Gross Margin include: LVS (46.9%), ORLY (51.4%), MPWR (55.2%), NEM (56.0%), REI (56.0%).

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Learn More About Gross Margin

Gross Margin vs Net Margin: Why the Gap Between Them Tells You Everything

Gross margin vs net margin: learn what the spread between them reveals about operating leverage, cost structure, and early warning signs in any stock.

The Formula

Gross Profit / Revenue

Why It Matters

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.