Dave & Buster’s Entertainment (PLAY)

Inventory turnover

		Jan 31, 2025	Feb 4, 2024	Jan 31, 2024	Jan 31, 2023	Jan 29, 2023
Cost of revenue	US$ in thousands	314,400	337,000	1,481,400	308,864	308,900
Inventory	US$ in thousands	39,800	37,200	37,200	45,421	45,400
Inventory turnover		7.90	9.06	39.82	6.80	6.80

January 31, 2025 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $314,400K ÷ $39,800K
= 7.90

Dave & Buster’s Entertainment has exhibited varying inventory turnover ratios over the past few years. The inventory turnover ratio measures how many times a company sells and replaces its inventory during a specific period.

In January 2023 and February 2023, the inventory turnover ratio was consistent at 6.80 times, indicating that the company effectively managed its inventory levels and swiftly converted inventory into sales.

However, in January 2024, there was a significant spike in the inventory turnover ratio to 39.82 times, suggesting that the company sold and replaced its inventory almost 40 times during that period. Such a high inventory turnover ratio could indicate either efficient inventory management or potential issues such as understocking, stockouts, or aggressive sales strategies.

By February 2024, the inventory turnover ratio decreased to 9.06 times, implying a more normalized rate compared to the exceptionally high turnover in the previous period.

In January 2025, the inventory turnover ratio stood at 7.90 times, showing a slight improvement from the previous year.

Overall, fluctuations in Dave & Buster’s inventory turnover ratio indicate changes in inventory management strategies, demand patterns, or operational efficiency. Further analysis of related factors can provide deeper insights into the company's inventory management practices and overall financial health.