Hormel Foods Corporation (HRL)
Inventory turnover
| Jan 28, 2024 | Oct 29, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 29, 2023 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | Jan 30, 2022 | Oct 31, 2021 | Jul 25, 2021 | Apr 25, 2021 | Jan 24, 2021 | Oct 25, 2020 | Jul 26, 2020 | Apr 26, 2020 | Jan 26, 2020 | Oct 27, 2019 | Jul 28, 2019 | Apr 28, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 11,138,030 | 11,106,700 | 11,102,220 | 11,096,600 | 11,165,860 | 11,200,540 | 11,384,690 | 11,300,390 | 10,862,100 | 10,337,080 | 9,375,720 | 8,850,930 | 8,661,080 | 8,565,950 | 8,601,130 | 8,494,940 | 8,399,280 | 8,351,810 | 8,369,810 | 8,443,800 |
| Inventory | US$ in thousands | 1,578,190 | 1,680,410 | 1,737,860 | 1,745,790 | 1,730,090 | 1,716,060 | 1,679,180 | 1,597,000 | 1,385,700 | 1,369,200 | 1,426,740 | 1,229,030 | 1,086,660 | 1,072,760 | 982,355 | 1,048,990 | 1,057,280 | 1,042,360 | 1,108,510 | 1,030,570 |
| Inventory turnover | 7.06 | 6.61 | 6.39 | 6.36 | 6.45 | 6.53 | 6.78 | 7.08 | 7.84 | 7.55 | 6.57 | 7.20 | 7.97 | 7.98 | 8.76 | 8.10 | 7.94 | 8.01 | 7.55 | 8.19 |
January 28, 2024 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $11,138,030K ÷ $1,578,190K
= 7.06
Hormel Foods Corp.'s inventory turnover over the past eight quarters has shown relatively consistent performance, ranging between 5.84 and 6.49 times. The company has effectively managed its inventory levels to support sales activity, with a higher turnover indicating that Hormel is selling through its inventory more frequently.
The inventory turnover ratio measures how efficiently a company is able to sell its inventory within a specific period. A higher ratio typically suggests a more efficient management of inventory levels, as it indicates that the company is selling its products quickly and not holding onto excess inventory.
Hormel's inventory turnover ratios, ranging between 5.84 and 6.49, reflect a healthy balance between stocking enough inventory to meet demand and avoiding excessive holding costs. Consistent turnover ratios over time suggest that the company has maintained good control over its inventory management processes.
Overall, the stable and relatively high inventory turnover ratios of Hormel Foods Corp. signify effective inventory management, which is crucial for optimizing working capital and maximizing profitability in the food industry.