Neogen Corporation (NEOG)

Inventory turnover

		May 31, 2025	May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021
Cost of revenue	US$ in thousands	473,285	460,322	416,492	284,146	253,403
Inventory	US$ in thousands	190,859	189,267	133,812	122,313	100,701
Inventory turnover		2.48	2.43	3.11	2.32	2.52

May 31, 2025 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $473,285K ÷ $190,859K
= 2.48

The analysis of Neogen Corporation's inventory turnover over the specified period reveals fluctuations in the efficiency with which the company manages its inventory.

As of May 31, 2021, the inventory turnover ratio was 2.52, indicating that the company's inventory was sold and replaced approximately 2.52 times during that fiscal year. This ratio declined slightly to 2.32 by May 31, 2022, suggesting a marginal decrease in inventory management efficiency, potentially reflecting slowed sales, increased inventory holdings, or both.

By May 31, 2023, the inventory turnover improved notably to 3.11, signaling increased efficiency in inventory management—more frequent sales relative to inventory on hand—possibly due to better sales performance, inventory optimization, or changes in product mix. However, in the subsequent year, the ratio decreased again to 2.43 by May 31, 2024, indicating a slight deterioration in inventory turnover, which could imply broader supply chain issues, decreased sales velocity, or increased inventory levels.

Most recently, as of May 31, 2025, the inventory turnover ratio stood at 2.48, marginally higher than the previous year but remaining below the peak achieved in 2023. This indicates a stabilization at a somewhat lower efficiency level relative to 2023 but still above the levels observed in 2022 and 2024.

Overall, the trend shows variability with a peak in 2023, followed by a slight decline and stabilization. These fluctuations could be influenced by external market conditions, internal inventory management strategies, or changes in product demand. Maintaining or improving inventory turnover is generally viewed positively, as it reflects efficient inventory utilization and effective sales performance.