VF Corporation (VFC)

Inventory turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Cost of revenue (ttm)	US$ in thousands	9,952,220	10,130,480	10,318,030	10,257,210	9,872,860	10,113,060	10,651,550	8,576,980	9,034,740	8,959,500	8,387,110	10,358,850	10,194,620	9,832,000	9,504,710	8,845,950	6,634,080	6,880,000	7,388,020	8,285,390
Inventory	US$ in thousands	1,794,520	2,082,920	2,110,600	1,697,820	2,094,220	2,405,290	2,787,020	2,292,790	2,591,920	2,749,890	2,341,400	1,418,670	1,287,210	1,464,710	1,216,820	1,061,840	1,075,980	1,434,840	1,402,860	1,293,910
Inventory turnover		5.55	4.86	4.89	6.04	4.71	4.20	3.82	3.74	3.49	3.26	3.58	7.30	7.92	6.71	7.81	8.33	6.17	4.79	5.27	6.40

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $9,952,220K ÷ $1,794,520K
= 5.55

Inventory turnover is a key financial ratio that measures the efficiency of a company in managing its inventory. It indicates how many times a company's inventory is sold and replaced over a certain period.

Analyzing VF Corporation's inventory turnover over time, we observe fluctuations in the ratio. From March 31, 2020, to December 31, 2020, the turnover remained relatively stable, ranging from 4.79 to 6.17. However, there was a significant increase in the turnover ratio in the subsequent periods, reaching a peak of 8.33 on March 31, 2021.

From June 30, 2021, to December 31, 2024, there was a noticeable decline in the inventory turnover ratio. It decreased from 7.81 on June 30, 2021, to 5.55 on December 31, 2024. Notably, in the most recent period ending December 31, 2024, the inventory turnover ratio improved slightly to 5.55.

The decline in inventory turnover from its peak indicates a slowdown in the company's ability to sell and replenish its inventory efficiently. This could suggest potential issues such as excessive inventory levels, slowing sales, or ineffective inventory management practices.

Overall, a declining inventory turnover ratio may warrant further investigation into VF Corporation's inventory management strategies to improve efficiency and optimize working capital utilization.