The Gap, Inc. (GAP)

Inventory turnover

		Feb 1, 2025	Feb 3, 2024	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021
Cost of revenue	US$ in thousands	8,859,000	9,114,000	10,257,000	10,033,000	9,095,000
Inventory	US$ in thousands	2,067,000	1,995,000	2,389,000	3,018,000	2,451,000
Inventory turnover		4.29	4.57	4.29	3.32	3.71

February 1, 2025 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $8,859,000K ÷ $2,067,000K
= 4.29

The inventory turnover ratio for The Gap, Inc. has shown fluctuations over the past five years. As of January 30, 2021, the inventory turnover ratio stood at 3.71, indicating that the company sold and replaced its inventory approximately 3.71 times during that fiscal year.

Subsequently, there was a slight decrease in the inventory turnover ratio to 3.32 by January 29, 2022. This may suggest a potential slowdown in the sales of inventory relative to the prior year.

However, the company's inventory turnover improved significantly by January 28, 2023, reaching 4.29. This indicates that The Gap, Inc. was able to sell and replace its inventory more efficiently during that fiscal year compared to the previous year.

Moreover, there was another increase in the inventory turnover ratio to 4.57 by February 3, 2024, further highlighting the company's effectiveness in managing its inventory levels and sales.

Despite a slight decline to 4.29 as of February 1, 2025, the inventory turnover ratio remains relatively high, indicating that The Gap, Inc. continues to efficiently sell and replace its inventory.

Overall, the trend in The Gap, Inc.'s inventory turnover ratio demonstrates improvements in the management of inventory levels and sales effectiveness over the years, which is a positive indicator of operational efficiency and financial health.