Gross Margin by Industry: 2025 Sector Benchmarks

Gross margin only means something in context — 30% is excellent for a grocer and a warning sign for a software company. This table shows the low, median, and high gross margin for all 11 GICS sectors, and the box below benchmarks any ticker against its own industry in one click.

By Basis Report Editorial DeskReviewed by Basis Report Methodology TeamMethodology

Typical gross margin ranges by GICS sector (2025). Highlighted row = the ticker you looked up.
Sector	Low	Median	High
Technology	45%	58%	72%
Healthcare	48%	62%	76%
Communication Services	42%	56%	70%
Consumer Staples	22%	32%	42%
Consumer Discretionary	28%	38%	52%
Industrials	22%	32%	44%
Financials	20%	30%	42%
Real Estate	38%	50%	62%
Materials	18%	28%	40%
Energy	15%	28%	42%
Utilities	30%	40%	52%

Ranges are sector estimates and will vary with the business cycle and the exact company set. Compute margins for any ticker with the Profit Margin Calculator, or see how margins flow into valuation in the DCF guide.

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Frequently asked questions

What is a good gross margin by industry?

There is no universal answer — a good gross margin is entirely sector-dependent. Software and healthcare companies routinely post 60%+ gross margins because the cost of delivering an additional unit is tiny, while grocers, energy producers, and materials companies operate profitably at 15–30% because their products carry heavy input costs. Use the table above to find the sector median first, then judge whether a company sits above or below its peers. A 35% gross margin is excellent for a supermarket and a red flag for a SaaS business.

How do I compare gross margins across sectors?

You generally shouldn't compare gross margins across sectors directly — the cost structures are too different to be meaningful. Instead, benchmark a company against the low/median/high range for its own industry. If you must compare across sectors, step down to a metric that normalizes for business model, such as operating margin or return on invested capital, which fold in the very different operating-cost and capital-intensity profiles that make raw gross margins incomparable between, say, a bank and a chipmaker.

What does a high gross margin indicate about a business?

A high and stable gross margin usually signals pricing power and a durable competitive advantage — the company can charge well above what it costs to produce its product, and competitors can't easily undercut it. High gross margins also give management room to invest heavily in R&D, marketing, or price cuts while staying profitable. The caveat: gross margin ignores operating expenses, so a business with a 70% gross margin can still lose money if its sales and overhead costs are bloated. Always pair gross margin with operating and net margin to see the full picture.

How to Use Gross Margin Benchmarks

Gross margin — revenue minus cost of goods sold, divided by revenue — measures how much of every sales dollar survives after the direct cost of producing the product. It is the purest read on pricing power and unit economics, before operating expenses, interest, and taxes enter the picture. A company with a durable, high gross margin can afford to spend heavily on growth and still turn a profit; a company scraping by on thin gross margin has far less room to maneuver.

The single most common mistake is comparing gross margins across sectors. Software and healthcare businesses structurally earn 60%+ because the marginal cost of another unit is near zero, while energy, materials, and consumer staples companies run profitably at 15–30% because raw inputs dominate their cost base. Find the sector row first, then judge whether a company sits above or below its industry median. Being above the median — and holding that margin steady over time — is the signal of a genuine competitive advantage.

Gross margin is a starting point, not the whole story. Because it excludes operating overhead, a company can post an impressive 70% gross margin and still lose money if sales and administrative costs are bloated. Always read gross margin alongside operating and net margin using the Profit Margin Calculator, and see how margin assumptions drive intrinsic value in the DCF guide.

More tools & guides

Profit Margin Calculator

Gross, operating, and net margin for any ticker, each against its sector

ROIC Calculator

Whether a dollar invested earns more than it costs — the deeper margin story

DCF Guide

How margins and growth flow through to intrinsic value, step by step