Dollar Tree Inc (DLTR)

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	11,284,100	21,529,600	22,166,700	22,144,600	22,007,700	21,324,700	20,653,900	20,606,900	20,558,500	20,703,800	20,848,400	20,624,400	20,399,400	19,709,600	19,018,500	18,713,000	18,784,900	19,087,500	19,095,100	19,189,500
Inventory	US$ in thousands	2,672,000	5,535,100	5,101,600	5,009,000	5,412,600	5,112,800	5,515,100	5,515,100	5,329,400	5,329,400	5,112,000	5,112,000	5,449,300	5,747,900	5,657,700	5,657,700	5,422,200	5,422,200	4,801,100	4,367,300
Inventory turnover		4.22	3.89	4.35	4.42	4.07	4.17	3.74	3.74	3.86	3.88	4.08	4.03	3.74	3.43	3.36	3.31	3.46	3.52	3.98	4.39

January 31, 2025 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $11,284,100K ÷ $2,672,000K
= 4.22

Inventory turnover is a key financial ratio that measures how efficiently a company manages its inventory. It indicates the number of times a company sells and replaces its inventory during a specific period.

By analyzing the inventory turnover data of Dollar Tree Inc from January 31, 2022, to January 31, 2025, we can observe fluctuations in the ratio. The inventory turnover ratio for Dollar Tree Inc ranged from 3.31 to 4.42 during this period.

A higher inventory turnover ratio typically indicates that the company is managing its inventory effectively and efficiently. It shows that the company is selling its inventory quickly, which can reduce holding costs and minimize the risk of inventory becoming obsolete.

On the other hand, a lower inventory turnover ratio may suggest that the company is facing challenges in selling its inventory or may have an excessive amount of stock on hand. This can lead to increased holding costs and potential write-downs if inventory becomes outdated or unsellable.

In the case of Dollar Tree Inc, the fluctuating inventory turnover ratio implies varying levels of inventory management efficiency over the analyzed period. It is essential for the company to monitor and optimize its inventory levels to ensure smooth operations and maximize profitability.