Williams-Sonoma Inc (WSM)
Inventory turnover
| Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Feb 2, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 2,080,810 | 2,181,910 | 2,178,850 | 1,725,570 | 1,673,220 |
| Inventory | US$ in thousands | 1,246,370 | 1,456,120 | 1,246,370 | 1,006,300 | 1,100,540 |
| Inventory turnover | 1.67 | 1.50 | 1.75 | 1.71 | 1.52 |
January 28, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $2,080,810K ÷ $1,246,370K
= 1.67
Inventory turnover is a crucial financial ratio that indicates how many times a company's inventory is sold and replaced over a period. The trend analysis of Williams-Sonoma Inc's inventory turnover over the past five years shows fluctuations. In 2024, the inventory turnover ratio increased to 1.67 from 1.50 in 2023, implying that the company sold through its inventory more efficiently. However, compared to the peak in 2022 at 1.75, the ratio slightly decreased. This suggests that in 2024, Williams-Sonoma Inc may have held inventory longer before selling it compared to the previous year. Overall, a consistently higher inventory turnover ratio is favorable as it indicates stronger sales performance and efficient inventory management.