Five Below Inc (FIVE)

Inventory turnover

		Feb 3, 2024	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020
Cost of revenue	US$ in thousands	3,192,100	2,847,580	2,573,900	1,885,680	1,693,720
Inventory	US$ in thousands	584,627	527,720	455,104	281,267	324,028
Inventory turnover		5.46	5.40	5.66	6.70	5.23

February 3, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $3,192,100K ÷ $584,627K
= 5.46

Five Below Inc's inventory turnover has been relatively stable over the past five years, ranging from 5.23 to 6.70. The inventory turnover measures how efficiently the company is managing its inventory by showing how many times the company's inventory is sold and replaced during a specific period.

A higher inventory turnover ratio indicates that the company is selling its inventory at a faster rate, which may suggest efficient inventory management and strong sales. On the other hand, a lower inventory turnover ratio may indicate slower sales, excess inventory, or inefficient inventory management.

In this case, the company's inventory turnover ratio has averaged around 5.70 over the past five years, with the highest turnover seen in January 2021 at 6.70 and the lowest in February 2020 at 5.23. Overall, Five Below Inc's inventory turnover ratios indicate that the company has been effectively managing its inventory levels and achieving a balance between stocking enough inventory to meet demand and avoiding excess inventory accumulation.