Kontoor Brands Inc (KTB)

Days of inventory on hand (DOH)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover		5.84	4.60	3.84	6.05	5.86
DOH	days	62.49	79.38	95.15	60.36	62.25

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 5.84
= 62.49

The days of inventory on hand (DOH) is a measure of how efficiently a company manages its inventory levels. A lower DOH indicates that the company is selling its inventory faster, which is generally more desirable as it reduces holding costs and the risk of inventory becoming obsolete.

Analyzing the trend in Kontoor Brands Inc's DOH over the five-year period shows some fluctuations. The DOH decreased from 62.25 days as of December 31, 2020, to 60.36 days as of December 31, 2021, indicating an improvement in inventory management efficiency during this period.

However, there was a significant increase in the DOH to 95.15 days as of December 31, 2022, suggesting that the company may have experienced challenges in selling its inventory efficiently during that year. Subsequently, the DOH decreased to 79.38 days by December 31, 2023, but remained elevated compared to the initial years.

By the end of December 31, 2024, the DOH decreased again to 62.49 days, which is close to the levels seen in the earlier years. This indicates a potential improvement in inventory management efficiency, bringing it back to a more optimal level.

In conclusion, while Kontoor Brands Inc experienced fluctuations in its DOH over the five-year period, the company managed to reduce its DOH towards the end of the period, showing efforts to enhance inventory turnover and potentially optimize its working capital management.