Best Buy also said it continues to expect 2013 comp store sales, gross margin, earnings and inventory levels to be in line with previous expectations.

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This is the demand for the gross domestic product of a country when inventory levels are static.

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In addition to the store closures, Sears Holdings said it plans to reduce inventory, focus on improving gross profit dollars, and reduce its fixed costs.

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Without the inventory reductions, we believe gross margin for the second quarter would have been in the mid-single digits, which would have resulted in income close to break-even.

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Additionally, due to a decrease in inventory step-up, GAAP gross margins saw a slight increase this quarter.

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Excluding a non-cash inventory provision, the company says gross margin was about 12%.

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Yeung said the company has been working to manage down inventory in an attempt to improve gross margins during the slowdown and will continue cost-cutting actions.

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In gross terms, that yields an 8% loss in inventory.

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While the decline of 4.7% in its gross margins was primarily due to promotions to clear off piling inventory, rising cotton prices also contributed their bit in the decline.

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Conversely, Amazon generally recognizes sales of items it sells from its own inventory (first party or 1P) and related shipping fees as gross revenues.

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However, our gross margin and bottom line have been impacted by worse than anticipated market conditions and inventory provisions.

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Saks warned that gross margins will slip about a half point in the fourth quarter as it discounts to reduce inventory.

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On its post-earnings conference call, OmniVision said the weaker gross margin in the April quarter reflects the impact of a decrease in sales of previously written down inventory and an increase in inventory valuation allowances.

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