Sally Beauty Holdings Inc (SBH)
Inventory turnover
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 3,438,100 | 3,407,100 | 3,507,050 | 3,463,150 | 3,264,570 |
| Inventory | US$ in thousands | 1,036,620 | 975,218 | 936,374 | 871,349 | 814,503 |
| Inventory turnover | 3.32 | 3.49 | 3.75 | 3.97 | 4.01 |
September 30, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $3,438,100K ÷ $1,036,620K
= 3.32
Sally Beauty Holdings Inc's inventory turnover has experienced a declining trend over the past five years, decreasing from 4.01 in 2020 to 3.32 in 2024. This indicates that the company is taking longer to sell through its inventory, which could potentially signify inefficiencies in inventory management or declining sales volume relative to its inventory levels. A lower inventory turnover ratio may also suggest inadequate demand forecasting, overstocking, or poor inventory control practices.
It is essential for Sally Beauty Holdings Inc to closely monitor its inventory turnover ratio to ensure optimal inventory management practices. By improving inventory turnover, the company can minimize carrying costs, reduce the risk of obsolescence, and free up capital for investment in other areas of the business. This analysis underscores the importance of efficiently managing inventory to maintain a healthy financial position and sustain long-term profitability.
Peer comparison
Sep 30, 2024