Inter Parfums Inc (IPAR)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	478,622	392,278	322,598	208,269	267,564
Inventory	US$ in thousands	371,859	289,984	198,914	158,822	167,809
Inventory turnover		1.29	1.35	1.62	1.31	1.59

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $478,622K ÷ $371,859K
= 1.29

Interpreting the inventory turnover trend of Inter Parfums, Inc. reveals fluctuations over the past five years. The inventory turnover ratio decreased from 1.59 in 2019 to 1.29 in 2023, indicating a decline in the company's efficiency in managing and selling its inventory. Although the ratio experienced a slight increase in 2022, it remained below the levels seen in 2019 and 2021.

A lower inventory turnover ratio may suggest excess inventory levels, slow-moving or obsolete goods, or inefficiencies in sales and inventory management processes. This can tie up financial resources, increase storage costs, and potentially lead to inventory writedowns.

Further analysis of the root causes behind the declining inventory turnover is essential to identify areas for improvement and enhance operational efficiency within Inter Parfums, Inc.'s supply chain and inventory management practices.