Lowe's Companies Inc (LOW)

Inventory turnover

		Feb 2, 2024	Feb 3, 2023	Jan 28, 2022	Jan 29, 2021	Jan 31, 2020
Cost of revenue	US$ in thousands	74,820,000	91,058,000	84,157,000	79,950,000	65,834,000
Inventory	US$ in thousands	16,894,000	18,532,000	17,605,000	16,193,000	13,179,000
Inventory turnover		4.43	4.91	4.78	4.94	5.00

February 2, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $74,820,000K ÷ $16,894,000K
= 4.43

Lowe's Companies Inc has demonstrated a consistent inventory turnover performance over the past five years. The inventory turnover ratio measures the efficiency of a company in managing its inventory by showing how many times the company's inventory is sold and replaced within a specific timeframe.

In this case, Lowe's inventory turnover ratios have ranged from 4.43 to 5.00 over the past five years. A higher inventory turnover ratio indicates that the company is selling its inventory more quickly, which is generally favorable as it implies better inventory management and reduced risk of obsolete inventory.

Lowe's inventory turnover has shown a slight fluctuation, with a peak of 5.00 in January 2020 and a low of 4.43 in February 2024. Despite the slight variation, the company has maintained a relatively stable inventory turnover performance, hovering around the 4.78 to 5.00 range. This suggests that Lowe's efficiently manages its inventory, which can positively impact its profitability and cash flow management.

Overall, Lowe's consistent inventory turnover ratios indicate effective inventory management practices, which can contribute to the company's financial health and operational efficiency.