Lowe’s Cos. Inc. (NYSE:LOW)

Inventory Turnover

The inventory turnover ratio exhibits moderate fluctuations over the periods analyzed, generally ranging between approximately 3.0 and 3.9. A slight downward trend is observed starting around early 2022, with values declining from around 3.65 to a lower bound near 3.03, followed by a modest recovery to about 3.4 in the most recent period. This suggests a somewhat less efficient inventory management or increased inventory levels relative to cost of goods sold during the latter periods.

Payables Turnover

The payables turnover ratio shows noticeable volatility but generally maintains a range between 4.1 and 6.6. The earlier periods begin with moderate turnover ratios around 4.6 to 5.6, followed by intermittent peaks reaching over 6.6, particularly from 2023 onward. This pattern indicates variability in the company’s payment speed to suppliers, with some periods marked by faster payments (higher turnover) and others by slower payments (lower turnover), reflecting dynamic management of payables possibly aligned with cash flow optimization strategies.

Working Capital Turnover

This ratio demonstrates significant fluctuations, with some extreme values notably during the periods ending January 2022 and August 2025 (245.54 and 290.03 respectively), which are outliers relative to the otherwise varied range between approximately 11.6 and 52.3. Such spikes suggest substantial shifts in working capital levels relative to sales, possibly due to unusual operational conditions, accounting adjustments, or one-off events. Overall, the trend indicates episodic improvements in working capital efficiency interspersed with periods of more normalized activity.

Average Inventory Processing Period

The average inventory processing period remains relatively stable yet exhibits a minor increasing tendency in recent periods. Initially fluctuating around 94 to 106 days, the period increases to a range closer to 107 to 121 days toward the end of the dataset. This reflects a gradual lengthening in the time inventory is held, which is consistent with the slightly declining inventory turnover ratio and could imply slower movement or increased stock levels.

Average Payables Payment Period

The average payables payment period fluctuates between about 55 and 87 days. Early in the time series, periods over 80 days are recorded but later show a reduction to roughly 55-60 days, especially from 2022 onward, indicating a tendency toward faster payment cycles. Nonetheless, some increases occur intermittently, suggesting variability in payment terms or cash management policies.

Overall Insights

The data portrays a company actively managing inventory and payables with some volatility in operational efficiency metrics. The marked spikes in working capital turnover ratios likely reflect extraordinary factors or transient conditions requiring focused investigation. Inventory turnover and processing periods indicate a modestly slower inventory movement in more recent years, while payables turnover and payment periods reveal attempts to balance supplier payment timing against operational liquidity needs.

Cost of Sales

The cost of sales exhibits a cyclical pattern consistent with seasonal trends, showing peaks typically around mid-year quarters. Starting in May 2020 at approximately $13.16 billion, it increased significantly by July 2020 to about $18.00 billion, indicating strong sales or higher procurement costs. A decrease follows in the subsequent quarter, with fluctuations continuing through the observed periods. Notably, a declining trend is visible in early 2024, with figures tapering down to around $12.46 billion by August 2025, suggesting possible cost management improvements or sales volume adjustments over time.

Merchandise Inventory, Net

The merchandise inventory levels show a gradual upward trajectory from May 2020 to early 2022, peaking around $20.24 billion in April 2022. This buildup indicates an accumulation of stock, potentially preparing for anticipated demand or supply chain timing effects. After this peak, inventory levels fluctuate moderately but remain generally elevated, with values oscillating between approximately $16.34 billion and $19.23 billion from mid-2022 through August 2025. The data suggest ongoing management of inventory levels balancing between overstocking and meeting demand requirements.

Inventory Turnover Ratio

The inventory turnover ratio fluctuates between roughly 3.0 and 3.9 times across the periods, signaling variability in how efficiently inventory is converted into sales. Initially rising from 3.52 in May 2020 to a peak of 3.90 in July 2020, the ratio declines gradually with intermittent recoveries. More specifically, a downward trend in turnover is observed post-2021, dropping to lows near 3.03 by mid-2025, before experiencing slight improvement. This pattern may reflect longer holding periods for inventory or changes in sales velocity, correlating with the increasing inventory levels noted previously.

Overall Analysis

The combined data portray a business environment characterized by seasonal variations, with inventory and sales costs responding to cyclical demand. Inventory accumulation through 2022, accompanied by a declining turnover ratio, suggests potential challenges in inventory management or market demand shifts. Meanwhile, the reduction in cost of sales in later periods may indicate strategic efforts to enhance profitability or adjust to market conditions. Continuous monitoring of inventory efficiency and cost control will be crucial for maintaining financial health going forward.

The analysis of the recent quarterly financial metrics indicates notable fluctuations and trends in cost of sales, accounts payable, and payables turnover ratios over the observed periods.

Cost of Sales

The cost of sales demonstrates considerable variability across the quarters. Initially, there is an increase observed from early 2020 through mid-2021, with peaks in mid-2020 and mid-2021 periods. Subsequently, there is a pattern of alternating rises and declines, with cost values generally decreasing toward the latest reported quarters in 2025. This indicates some degree of cyclical behavior or responses to changing market conditions affecting inventory and production costs.

Accounts Payable

Accounts payable figures exhibit moderate volatility, with some distinct peaks and troughs. Notably, there are significant increases around mid-2021 and mid-2022, whereas the latest periods in 2025 show relatively lower payable amounts compared to those peaks. Overall, the accounts payable trend mirrors some of the cost fluctuations but with less pronounced extremes, suggesting variations in payment timing or supplier credit terms.

Payables Turnover Ratio

The payables turnover ratio displays a wide range of values over the quarters, fluctuating between approximately 4.18 and 6.61. Higher turnover ratios, observed notably in early 2023 and early 2025, reflect a faster rate of paying suppliers during those periods. Lower ratios occurring mid-2020 and mid-2022 imply a slower payment cycle. The variability in the turnover ratio correlates with the shifts in accounts payable and cost of sales, indicating responsive management of payables in light of operational cash flow and purchasing activities.

In summary, the data reveals dynamic management of costs and liabilities, with cost of sales and accounts payable showing periodic increases and decreases, while payables turnover reflects adaptive payment practices. These trends suggest strategic adjustments to procurement and payment schedules possibly influenced by broader market conditions and operational requirements.

The financial data reveals several notable trends in the company's operational and sales efficiency over the analyzed quarters.

Working Capital

Working capital exhibits considerable fluctuations throughout the periods. Initially, there is a significant increase from 3,601 million USD to a peak of 7,352 million USD by October 2020, followed by a sharp decline to 392 million USD by January 2022. Subsequently, working capital shows volatility with multiple peaks and troughs ranging between 287 million USD and 4,708 million USD, ending at 1,017 million USD in August 2025. This inconsistency suggests varying cash flow management and inventory levels, potentially influenced by seasonal factors or strategic changes.

Net Sales

Net sales display a cyclical pattern with repeated rises and falls across quarters. Starting at 19,675 million USD in May 2020, sales increase significantly to approximately 27,570 million USD in July 2021. The values then oscillate, showing seasonal trends with peaks around mid-year and dips toward the beginning and end of calendar years. The latest data points indicate sales of around 23,959 million USD in August 2025, similar to earlier levels, suggesting stable but variable demand within the retail sector.

Working Capital Turnover Ratio

The working capital turnover ratio shows extreme variability, frequently reaching very high values such as 245.54 in January 2022, 290.03 in August 2025, and 82.22 in the subsequent quarter. These peaks occur alongside very low working capital figures, causing the ratio to spike due to the turnover effect. More typical ratios range approximately between 11.6 and 52.26, indicating periods of efficient use of working capital relative to sales. However, the sharp fluctuations point to irregularities in working capital scale rather than smooth operational efficiency changes.

In summary, the data indicates that while net sales present a consistent seasonal pattern, working capital levels are highly volatile, leading to fluctuating efficiency as reflected in the turnover ratios. This volatility in working capital may reflect inventory management strategies, payment terms, or other short-term financial adjustments. The company’s ability to convert working capital into sales varies widely by quarter, implying opportunities for stabilizing working capital management to improve financial predictability and performance efficiency.

The inventory turnover ratio and the average inventory processing period demonstrate notable fluctuations over the analyzed time frame, revealing underlying trends in inventory management efficiency.

Inventory Turnover Ratio

The inventory turnover ratio begins at 3.52 and experiences an initial increase, reaching a peak of 3.9 around mid-2020. Following this peak, the ratio exhibits periodic declines and recoveries, generally fluctuating between approximately 3.0 and 3.8. In later periods, particularly from early 2023 onward, the ratio trends slightly downward and stabilizes around the mid-3.0 range, ending near 3.4. These variations suggest cycles of more and less frequent inventory turnover, with the overall trend indicating a moderate decrease in turnover frequency towards the latter stages.

Average Inventory Processing Period

The average inventory processing period, measured in days, inversely reflects the inventory turnover ratio. It starts at 104 days and decreases to a low of 94 days in mid-2020, indicating faster inventory processing at that time. Subsequently, the period extends and contracts, fluctuating approximately between 94 and 121 days throughout the periods examined. Notably, there is an increasing tendency in the average processing period from late 2021, with peaks observed at 117 and 121 days, indicating slower inventory cycles. Towards the end of the dataset, the processing period decreases again to near 107 days.

Overall Interpretation

The data reveals alternating phases of inventory management efficiency, with periods of faster turnover and shorter processing duration contrasted by intervals of slower inventory movement and longer processing times. The initial improvement in turnover efficiency during 2020 appears to wane over subsequent years, suggesting challenges in maintaining high inventory velocity consistently. This could reflect changes in supply chain dynamics, demand variability, or strategic adjustments in inventory policies. The late-period trends toward increased processing times warrant attention as they may impact working capital management and operational efficiency.

Payables Turnover Ratio

The payables turnover ratio exhibits notable fluctuations over the analyzed periods, ranging from a low of approximately 4.18 to a high near 6.61. Initially, the ratio experienced some volatility with a decline from 4.63 to 4.18, followed by a general upward trend reaching its peak at 6.61 around early 2024. This upward movement suggests an improvement in the company's efficiency in managing its short-term obligations to suppliers over this time frame. However, after peaking, the ratio shows some oscillation but generally remains elevated compared to earlier periods, indicating a sustained relatively efficient payables cycle.

Average Payables Payment Period (Days)

The number of days taken on average to settle payables inversely mirrors the payables turnover ratio trend. The payment period starts relatively high at 79 days, increasing to a peak near 87 days, then significantly decreasing to around 55 days at its minimum. This decline corresponds with the periods where the payables turnover ratio increases, reflecting faster payments to suppliers. Despite some variability, the downward trend in payment days suggests a strategic shift toward shortening payables duration during the most recent periods, potentially improving supplier relationships or leveraging early payment discounts. Towards the latest periods, the average payment days increase slightly but remain below earlier high levels.

Overall Insights

The combined analysis of payables turnover and average payment period indicates a move toward more prompt payments and enhanced payables management efficiency over the reviewed timeframe. The company appears to have adopted practices leading to quicker settlement of payables, particularly notable from mid-2022 through early 2024. The observed variations suggest responsiveness to changing financial or operational conditions, with some periods of payment extension followed by accelerated settlements. Maintaining a balance between managing cash flow and supplier terms likely underpins this pattern.