The Gap, Inc. (GAP)

Days of inventory on hand (DOH)

		Feb 1, 2025	Feb 3, 2024	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021
Inventory turnover		4.29	4.57	4.29	3.32	3.71
DOH	days	85.16	79.90	85.01	109.79	98.36

February 1, 2025 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 4.29
= 85.16

The days of inventory on hand (DOH) for The Gap, Inc. have shown fluctuations over the past five years. In January 2023, the DOH decreased significantly to 85.01 days from 109.79 days in January 2022. This suggests that the company managed its inventory more efficiently during that period. However, by February 2024, the DOH further decreased to 79.90 days, indicating even better inventory management practices.

Despite the decrease in DOH in February 2024, it increased slightly to 85.16 days by February 2025. This uptick may suggest a possible buildup of inventory relative to sales, signifying potential inefficiencies in managing inventory levels. In general, a lower DOH is preferable as it indicates that the company is selling its inventory more quickly and efficiently, minimizing carrying costs and potential obsolescence risks. Overall, The Gap, Inc. should continue to monitor its inventory levels closely to ensure a balance between meeting customer demand and optimizing its working capital.