AutoZone Inc (AZO)

Days of inventory on hand (DOH)

		Aug 31, 2024	May 4, 2024	Feb 10, 2024	Nov 18, 2023	Aug 26, 2023	May 6, 2023	Feb 11, 2023	Nov 19, 2022	Aug 27, 2022	May 7, 2022	Feb 12, 2022	Nov 20, 2021	Aug 28, 2021	May 8, 2021	Feb 13, 2021	Nov 21, 2020	Aug 29, 2020	May 9, 2020	Nov 23, 2019	Aug 31, 2019
Inventory turnover		1.41	1.37	1.41	1.45	1.45	—	—	—	1.38	—	—	1.51	1.49	—	—	1.34	1.47	—	1.25	1.27
DOH	days	259.03	266.93	259.69	251.74	250.86	—	—	—	264.52	—	—	242.50	245.02	—	—	272.82	248.45	—	292.65	286.70

August 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 1.41
= 259.03

AutoZone Inc's days of inventory on hand (DOH) has shown fluctuations over the past few years, with values ranging from lows of around 240 days to highs of almost 290 days. The DOH for most recent periods, August 31, 2024, and May 4, 2024, were 259.03 days and 266.93 days, respectively, indicating a slight increase in the time it takes to sell inventory.

The trend in DOH suggests that AutoZone may be carrying excess inventory relative to its sales volume, potentially impacting liquidity and tying up working capital. The increase in DOH could be a concern as it may lead to higher carrying costs, obsolescence, and markdowns.

It is essential for AutoZone to closely monitor and manage its inventory levels to optimize efficiency and profitability. Strategies such as implementing effective inventory management systems, improving demand forecasting, and enhancing supplier relationships could help in reducing DOH and improving overall operational performance.