Planet Fitness Inc (PLNT)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 190,026 | 177,200 | 258,333 | 193,372 | 194,449 |
| Inventory | US$ in thousands | 4,677 | 5,266 | 1,155 | 473 | 877 |
| Inventory turnover | 40.63 | 33.65 | 223.66 | 408.82 | 221.72 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $190,026K ÷ $4,677K
= 40.63
Planet Fitness Inc's inventory turnover has experienced a declining trend over the past five years, indicating that the company is taking longer to sell its inventory. The inventory turnover ratio decreased from 221.72 in 2019 to 40.63 in 2023. This suggests that, on average, Planet Fitness Inc has turned over its inventory 40.63 times in 2023 compared to 221.72 times in 2019.
A lower inventory turnover ratio could reflect issues such as overstocking, slow-moving inventory, or inefficiencies in inventory management. It may also indicate that the company is holding excess inventory that is not being sold quickly enough.
Management should investigate the reasons behind the declining inventory turnover and take necessary steps to optimize inventory levels, improve sales processes, and enhance inventory management practices to ensure efficient use of company resources.