Dollar Tree Inc (DLTR)

Inventory turnover

		Feb 3, 2024	Oct 28, 2023	Jul 29, 2023	Apr 29, 2023	Jan 28, 2023	Oct 29, 2022	Jul 30, 2022	Apr 30, 2022	Jan 29, 2022	Oct 30, 2021	Jul 31, 2021	May 1, 2021	Jan 30, 2021	Oct 31, 2020	Aug 1, 2020	May 2, 2020	Feb 1, 2020	Nov 2, 2019	Aug 3, 2019	May 4, 2019
Cost of revenue (ttm)	US$ in thousands	21,294,200	20,761,000	20,487,600	19,941,100	19,409,800	19,018,100	18,803,700	18,641,800	18,595,300	18,266,900	17,865,800	17,745,000	17,721,300	19,189,700	20,324,600	21,434,900	22,366,200	16,301,800	16,065,000	15,736,400
Inventory	US$ in thousands	5,412,600	5,515,100	5,329,400	5,112,000	5,747,900	5,657,700	5,422,200	4,801,100	4,570,500	4,316,000	3,667,700	3,604,600	3,599,700	3,792,300	3,275,700	3,198,500	3,522,000	3,882,900	3,470,900	3,325,500
Inventory turnover		3.93	3.76	3.84	3.90	3.38	3.36	3.47	3.88	4.07	4.23	4.87	4.92	4.92	5.06	6.20	6.70	6.35	4.20	4.63	4.73

February 3, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $21,294,200K ÷ $5,412,600K
= 3.93

Inventory turnover measures how efficiently a company manages its inventory by indicating how many times during a specific period (usually a year) the company sells and replaces its inventory. A higher inventory turnover ratio generally indicates that a company is effectively selling its inventory and restocking it quickly.

Analyzing Dollar Tree Inc's inventory turnover over time, we observe fluctuations in the ratio, ranging from a low of 3.36 to a high of 6.70. In recent periods, the trend has shown variability, with the ratio fluctuating but generally trending upwards. This indicates improvements in inventory management efficiency.

The most recent inventory turnover ratio of 3.93 suggests that, on average, Dollar Tree Inc sold and replaced its inventory approximately 3.93 times during the period. While this ratio is lower than some previous periods, it is important to consider the industry benchmarks and the company's specific business model when evaluating inventory turnover.

Overall, Dollar Tree Inc's inventory turnover indicates that the company has been managing its inventory reasonably well, with a good balance between selling and restocking inventory efficiently. However, it is important for the company to continue monitoring and optimizing its inventory management practices to ensure optimal operational efficiency and profitability.