Buckle Inc (BKE)

Inventory turnover

		Jan 31, 2025	Oct 31, 2024	Jul 31, 2024	Apr 30, 2024	Feb 3, 2024	Jan 31, 2024	Oct 31, 2023	Oct 28, 2023	Jul 31, 2023	Jul 29, 2023	Apr 30, 2023	Apr 29, 2023	Jan 31, 2023	Jan 28, 2023	Oct 31, 2022	Oct 29, 2022	Jul 31, 2022	Jul 30, 2022	Apr 30, 2022	Jan 31, 2022
Cost of revenue (ttm)	US$ in thousands	624,902	731,068	759,723	766,107	863,716	731,852	785,317	778,652	768,364	803,081	859,283	876,646	900,460	868,334	812,728	802,692	728,333	843,056	765,159	845,472
Inventory	US$ in thousands	120,789	149,351	131,418	130,661	126,290	126,290	152,289	152,289	136,074	136,074	137,735	137,735	125,134	125,134	152,335	152,335	128,498	128,498	121,166	102,095
Inventory turnover		5.17	4.89	5.78	5.86	6.84	5.80	5.16	5.11	5.65	5.90	6.24	6.36	7.20	6.94	5.34	5.27	5.67	6.56	6.31	8.28

January 31, 2025 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $624,902K ÷ $120,789K
= 5.17

Inventory turnover is a crucial financial ratio that measures how efficiently a company manages its inventory by evaluating how many times its inventory is sold and replaced over a specific period. For Buckle Inc, we observe fluctuations in its inventory turnover ratio over the mentioned time frame, ranging from a high of 8.28 to a low of 4.89.

In general, a higher inventory turnover ratio indicates that a company is selling its products quickly and efficiently, while a lower ratio may suggest overstocking or slow-moving inventory. Buckle Inc's inventory turnover shows a gradual decrease over the years, indicating a potential issue with inventory management efficiency.

Analyzing the data, we observe a decline in inventory turnover from 8.28 on January 31, 2022, to 5.17 on January 31, 2025. This trend suggests that Buckle Inc may be holding onto its inventory for longer periods, leading to potential carrying costs and tying up capital that could be used elsewhere in the business.

It is essential for Buckle Inc to monitor and optimize its inventory turnover ratio to ensure effective inventory management, minimize carrying costs, and maintain strong liquidity. Further analysis of the firm's inventory practices and forecasting demand accurately could lead to improvements in operational efficiency and financial performance.