Latest Report on Brady Could Cause Concern for Many
In a recent analysis, The Motley Fool, LLC takes a closer look at Brady's (NYSE: BRC) inventory situation. The author, who is co-advisor of Motley Fool Hidden Gems, provides no position in any company mentioned in the article at the time of publication.
Brady's inventory increase has been a point of interest, as it has outpaced its revenue increase over the past year. Specifically, finished goods inventory increased by 21.0% over the trailing-12-month period, while revenue increased by a more modest 3.7%. This discrepancy may indicate potential problems.
On a sequential-quarter basis, finished goods inventory increased by 5.0%. Over the same period, Brady's revenue dropped 8.3%, and inventory grew 2.2%. These figures suggest that product isn't moving as well as expected, which could be a warning sign.
However, it's important to note that not all inventory increase is cause for concern. For instance, a big increase in raw materials may indicate that a company is ramping up for increased demand. In the first half of the fiscal year 2023, the fastest-growing type of inventory at Brady is raw materials.
The author recommends monitoring inventory and other key metrics at favourite companies. To gain a better understanding of Brady's inventory situation, it's beneficial to compare different types of inventory. The author will provide details about Brady's inventory types for both quarterly and 12-month periods.
Investors should check Brady's filings for an explanation of the increase in finished goods inventory. It's also advisable to contact investor relations for more information. The Motley Fool has a disclosure policy.
The data provided is current as of the latest fully reported quarter. The author suggests keeping a close eye on Brady's inventory increase in the coming quarters to assess if the trend continues.
