Constellation Brands Inc Class A (STZ)

Inventory turnover

		Nov 30, 2024	Aug 31, 2024	May 31, 2024	Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020
Cost of revenue (ttm)	US$ in thousands	4,986,900	5,007,700	4,987,500	4,970,500	4,880,900	4,890,200	4,832,500	4,683,600	4,616,900	4,502,200	4,314,400	4,113,400	4,102,800	4,177,800	4,081,000	4,148,900	4,142,700	3,984,700	4,098,200	4,191,600
Inventory	US$ in thousands	2,129,600	2,098,600	2,127,000	2,078,300	1,988,000	1,814,000	1,951,400	1,898,700	1,802,000	1,651,000	1,656,400	1,573,200	1,518,900	1,339,000	1,377,600	1,291,100	1,376,900	1,328,400	1,332,600	1,373,600
Inventory turnover		2.34	2.39	2.34	2.39	2.46	2.70	2.48	2.47	2.56	2.73	2.60	2.61	2.70	3.12	2.96	3.21	3.01	3.00	3.08	3.05

November 30, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $4,986,900K ÷ $2,129,600K
= 2.34

The inventory turnover for Constellation Brands Inc Class A has shown a fluctuating trend over the past few years. From February 29, 2020, to May 31, 2021, the inventory turnover ratio hovered around 3, indicating that the company was able to turn over its inventory approximately three times during the period. However, the ratio decreased to 2.70 by November 30, 2021, and further declined to 2.39 by May 31, 2024.

A decreasing inventory turnover ratio suggests that Constellation Brands Inc Class A may be facing challenges in efficiently managing its inventory levels or experiencing difficulties in converting inventory into sales. A lower inventory turnover could indicate excess inventory on hand, potentially leading to increased storage costs, obsolescence, or markdowns to clear out older stock.

It is important for the company to closely monitor its inventory management processes and possibly streamline its supply chain to improve inventory turnover and optimize working capital utilization. Additionally, a declining inventory turnover ratio may also point towards changing consumer preferences, shifts in demand patterns, or challenges in forecasting sales accurately. Further analysis and action may be needed to address these underlying issues and enhance operational efficiency.