Helen of Troy Ltd (HELE)
Inventory turnover
| Feb 28, 2025 | Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 993,259 | 997,370 | 1,011,825 | 1,015,584 | 1,060,857 | 1,081,309 | 1,097,406 | 1,135,450 | 1,173,316 | 1,232,637 | 1,281,758 | 1,246,444 | 1,270,168 | 1,215,359 | 1,214,718 | 1,250,594 | 1,171,497 | 1,142,210 | 1,056,564 | 991,892 |
| Inventory | US$ in thousands | 452,615 | 450,740 | 469,625 | 444,749 | 395,995 | 426,026 | 435,681 | 433,913 | 455,485 | 536,793 | 643,192 | 613,625 | 557,992 | 585,811 | 606,655 | 540,129 | 481,611 | 383,440 | 350,180 | 276,327 |
| Inventory turnover | 2.19 | 2.21 | 2.15 | 2.28 | 2.68 | 2.54 | 2.52 | 2.62 | 2.58 | 2.30 | 1.99 | 2.03 | 2.28 | 2.07 | 2.00 | 2.32 | 2.43 | 2.98 | 3.02 | 3.59 |
February 28, 2025 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $993,259K ÷ $452,615K
= 2.19
Inventory turnover is a key financial ratio that measures how efficiently a company manages its inventory. In the case of Helen of Troy Ltd, the inventory turnover has been fluctuating over the past few years.
The trend shows a gradual decline in inventory turnover from 3.59 on May 31, 2020, to a low of 1.99 on August 31, 2022. This indicates that the company took longer to sell its inventory during this period. However, there was a slight improvement in inventory turnover from August 31, 2022, onwards, reaching 2.19 by February 28, 2025.
A low inventory turnover can be a sign of overstocking or slow-moving inventory, which ties up capital and may indicate inefficiencies in the company's operations. On the other hand, a high inventory turnover ratio suggests that the company is efficiently managing its inventory by quickly selling its products, which can lead to higher profitability.
Overall, Helen of Troy Ltd should continue monitoring its inventory turnover ratio and take measures to optimize its inventory management to ensure efficient use of resources and improved financial performance.