Lululemon Athletica Inc. (LULU)

Inventory turnover

		Jan 31, 2025	Oct 31, 2024	Jul 31, 2024	Apr 30, 2024	Jan 31, 2024	Jan 28, 2024	Oct 31, 2023	Oct 29, 2023	Jul 31, 2023	Jul 30, 2023	Apr 30, 2023	Jan 31, 2023	Jan 29, 2023	Oct 31, 2022	Oct 30, 2022	Jul 31, 2022	May 1, 2022	Apr 30, 2022	Jan 31, 2022	Jan 30, 2022
Cost of revenue (ttm)	US$ in thousands	4,317,310	4,189,450	5,485,606	5,474,267	6,332,044	5,941,018	5,379,718	5,282,151	4,734,771	4,299,794	3,387,921	4,042,394	3,611,026	4,488,469	4,413,502	3,801,983	4,528,821	3,796,729	4,214,279	3,929,270
Inventory	US$ in thousands	1,442,080	1,800,890	1,429,040	1,345,270	1,323,600	1,323,600	1,663,620	1,663,620	1,660,750	1,660,750	1,580,310	1,447,370	1,447,370	1,741,720	3,483,430	1,462,080	1,275,040	1,275,040	966,481	966,481
Inventory turnover		2.99	2.33	3.84	4.07	4.78	4.49	3.23	3.18	2.85	2.59	2.14	2.79	2.49	2.58	1.27	2.60	3.55	2.98	4.36	4.07

January 31, 2025 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $4,317,310K ÷ $1,442,080K
= 2.99

Over the past few years, Lululemon Athletica Inc.'s inventory turnover ratio has fluctuated. The inventory turnover ratio measures how efficiently a company manages its inventory by calculating the number of times the inventory is sold and replaced during a specific period.

From January 2022 to January 2025, Lululemon's inventory turnover ratio has ranged from a low of 1.27 to a high of 4.78. A higher ratio indicates that the company is selling its inventory more quickly, which is generally viewed positively as it signifies efficient inventory management. Conversely, a lower ratio may imply excess inventory levels or slower sales.

Lululemon's inventory turnover ratio saw a significant increase from January 2022 to January 2024, peaking at 4.78, suggesting improved inventory management efficiency during this period. However, the ratio decreased slightly by January 2025 to 2.99, indicating a potential slowdown in inventory turnover.

Overall, Lululemon should continue monitoring its inventory turnover ratio to ensure optimal inventory levels are maintained, avoiding both stockouts and excess inventory. Maintaining a healthy balance in inventory turnover is crucial for optimizing working capital and profitability.