Freshpet Inc (FRPT)

Days of inventory on hand (DOH)

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Inventory turnover 7.17 8.16 7.02 7.40 9.72
DOH days 50.91 44.73 51.98 49.31 37.54

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 7.17
= 50.91

The days of inventory on hand (DOH) for Freshpet Inc. over the reported periods demonstrate notable fluctuations that reflect the company's inventory management and operational efficiency trends. As of December 31, 2020, the DOH was approximately 37.54 days, indicating a relatively efficient inventory turnover period, which aligns with a lean inventory approach typical for a perishable goods company.

Between 2020 and 2021, the DOH increased significantly to approximately 49.31 days, representing an approximate 31.4% rise. This shift may suggest a slowdown in inventory turnover, a deliberate accumulation of inventory in anticipation of market demand, or potential supply chain adjustments.

The trend continued upward into 2022, reaching approximately 51.98 days. This represents a further increase of about 5.4% over the prior year, potentially indicating extended holding periods that might be driven by strategic inventory build-up, manufacturing scaling, or challenges in inventory liquidation.

In 2023, the DOH decreased to roughly 44.73 days, reflecting an approximately 13.9% reduction from the previous year. This decline could indicate improvements in inventory management efficiency, faster turnover, or adjustments in production and procurement strategies to align more closely with demand.

By 2024, the DOH rose again to approximately 50.91 days, nearing the 2022 levels. This increase may signal a reaccumulation of inventory, potential seasonal factors, supply chain considerations, or shifts in sales velocities, resulting in longer inventory holding periods.

Overall, the trends in DOH for Freshpet Inc. depict periods of fluctuation, with notable peaks in 2021 and 2022 and a temporary improvement in inventory efficiency in 2023. These variations highlight the company's ongoing adjustments to operational or market conditions, and the dynamics of inventory management strategies within the context of freshness and perishable inventory considerations typical for Freshpet's product line.