Williams-Sonoma Inc (WSM)
Inventory turnover
| Jan 31, 2025 | Jan 31, 2024 | Jan 28, 2024 | Jan 31, 2023 | Jan 29, 2023 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 4,129,240 | 4,447,050 | 2,080,810 | 4,996,680 | 2,181,910 |
| Inventory | US$ in thousands | 1,332,430 | 1,246,370 | 1,246,370 | 1,456,120 | 1,456,120 |
| Inventory turnover | 3.10 | 3.57 | 1.67 | 3.43 | 1.50 |
January 31, 2025 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $4,129,240K ÷ $1,332,430K
= 3.10
Williams-Sonoma Inc's inventory turnover has exhibited fluctuating trends over the past few years. The inventory turnover ratio, calculated by dividing cost of goods sold by average inventory, provides insights into how efficiently the company is managing its inventory.
In January 2023, the inventory turnover stood at 1.50, indicating that the company's inventory was turned over 1.50 times during the period. This suggests a relatively lower rate of inventory turnover, which could imply inefficiencies in managing stock levels or challenges in sales and demand forecasting.
By January 2024, the inventory turnover had improved to 1.67, showing a slight increase in the efficiency of inventory management. This could be attributed to better inventory control measures or adjustments in purchasing and stocking strategies.
Subsequently, in January 2025, the inventory turnover ratio further increased to 3.10, signifying a more significant improvement in inventory management efficiency. A higher turnover ratio suggests that Williams-Sonoma Inc was able to sell and replace its inventory more frequently during the period, potentially leading to reduced carrying costs and better cash flow management.
Overall, the increasing trend in inventory turnover from 2023 to 2025 reflects a positive development in how effectively Williams-Sonoma Inc is utilizing its inventory to support sales activities and optimize its operations.