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If you're looking for ideas in the retail industry, the following list might offer an interesting starting point...

Here we present a list of 11 companies from the retail industry that have seen favorable quarterly inventory trends year-over-year.

We began by running an inventory analysis on approximately 120 retail names. We compared MRQ revenue growth y/y with inventory growth for the same time period. We also looked at how inventory, as a percentage of current assets, changed over this period.

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All of the companies listed below have seen quarterly revenue growth in excess of inventory growth, as well as inventory becoming a decreasing proportion of current assets.

To help understand why these trends are positive, think of why the opposite trends would be negative. If inventory were growing faster than revenue, it would probably indicate that the company is having trouble selling its inventory. Activity ratios such as Inventory Turnover would decrease, and management ratios such as Return on Assets would decrease too, all else constant.

Of course there are several potential explanations for changes in inventory, such as changes in corporate structure, accounting method, or pricing strategy.

Do you think these companies are becoming more productive? Use this list as a starting-off point for your own analysis into the retail industry.

List sorted by difference between quarterly revenue growth and quarterly inventory growth, year-over-year.

1. Gildan Activewear Inc. (NYSE:GIL): Apparel Clothing Industry. Market cap of $4.05B. Quarterly revenue grew by 50.30% year-over-year, while quarterly inventory grew by 6.24%. Quarterly inventory, as a percentage of current assets, decreased from 58.97% to 48.36% year-over-year. The stock has gained 5.05% over the last week.

2. Lululemon Athletica Inc. (NASDAQ:LULU): Apparel Clothing Industry. Market cap of $6.33B. Quarterly revenue grew by 52.79% year-over-year, while quarterly inventory grew by 30.41%. Quarterly inventory, as a percentage of current assets, decreased from 20.36% to 14.76% year-over-year. This is a risky stock that is significantly more volatile than the overall market (beta = 2.64). The stock has had a couple of great days, gaining 13.34% over the last week.

3. Ascena retail group inc. (NASDAQ:ASNA): Apparel Stores Industry. Market cap of $2.56B. Quarterly revenue grew by 26.60% year-over-year, while quarterly inventory grew by 11.89%. Quarterly inventory, as a percentage of current assets, decreased from 35.27% to 34.62% year-over-year. The stock is a short squeeze candidate, with a short float at 11.53% (equivalent to 8.65 days of average volume). The stock has gained 19.29% over the last year.

4. Tractor Supply Company (NASDAQ:TSCO): Specialty RetailIndustry. Market cap of $4.44B. Quarterly revenue grew by 19.72% year-over-year, while quarterly inventory grew by 8.88%. Quarterly inventory, as a percentage of current assets, decreased from 76.87% to 70.57% year-over-year. Relatively low correlation to the market (beta = 0.78), which may be appealing to risk-averse investors. The stock has gained 7.63% over the last week.

5. PriceSmart Inc. (NASDAQ:PSMT): Discount, Variety Stores Industry. Market cap of $1.11B. Quarterly revenue grew by 22.40% year-over-year, while quarterly inventory grew by 14.90%. Quarterly inventory, as a percentage of current assets, decreased from 69.95% to 66.79% year-over-year. The stock has gained 7.84% over the last week.

6. Zumiez, Inc. (NASDAQ:ZUMZ): Apparel Stores Industry. Market cap of $823.09M. Quarterly revenue grew by 17.94% year-over-year, while quarterly inventory grew by 10.57%. Quarterly inventory, as a percentage of current assets, decreased from 29.31% to 28.03% year-over-year. Short float at 18.29% (equivalent to 7.74 days of average volume), implying the stock is a short squeeze candidate. The stock has had a couple of great days, gaining 12.07% over the last week.

7. Jos. A Bank Clothiers Inc. (NASDAQ:JOSB): Apparel Stores Industry. Market cap of $1.40B. Quarterly revenue grew by 13.95% year-over-year, while quarterly inventory grew by 6.87%. Quarterly inventory, as a percentage of current assets, decreased from 50.56% to 43.76% year-over-year. The stock is a short squeeze candidate, with a short float at 19.29% (equivalent to 12.02 days of average volume). JOSB is also exhibiting strong upside momentum--currently trading 8.46% above its SMA20, 11.45% above its SMA50, and 20.53% above its SMA200. The stock has gained 7.55% over the last week.

8. Libbey Inc. (NYSEMKT:LBY): Housewares & Accessories Industry. Market cap of $471.41M. Quarterly revenue grew by 7.10% year-over-year, while quarterly inventory grew by 2.87%. Quarterly inventory, as a percentage of current assets, decreased from 49.66% to 45.88% year-over-year. The stock has gained 31.78% over the last year.

9. Sally Beauty Holdings Inc. (NYSE:SBH): Specialty Retail Industry. Market cap of $2.53B. Quarterly revenue grew by 12.59% year-over-year, while quarterly inventory grew by 9.12%. Quarterly inventory, as a percentage of current assets, decreased from 79.60% to 78.19% year-over-year. The stock is a short squeeze candidate, with a short float at 5.12% (equivalent to 11.01 days of average volume). The stock has gained 52.38% over the last year.

10. Saks Incorporated (NYSE:SKS): Department Stores Industry. Market cap of $1.86B. Quarterly revenue grew by 6.78% year-over-year, while quarterly inventory grew by 3.42%. Quarterly inventory, as a percentage of current assets, decreased from 70.11% to 63.29% year-over-year. This is a risky stock that is significantly more volatile than the overall market (beta = 2.67). Short float at 23.97% (equivalent to 8.63 days of average volume), implying the stock is a short squeeze candidate.

11. Foot Locker, Inc. (NYSE:FL): Apparel Stores Industry. Market cap of $3.06B. Quarterly revenue grew by 5.06% year-over-year, while quarterly inventory grew by 2.12%. Quarterly inventory, as a percentage of current assets, decreased from 58.52% to 54.76% year-over-year. The stock has gained 32.8% over the last year.

*Inventory and revenue data sourced from Google Finance, all other data sourced from Finviz.

Source: 11 Retail Stocks With Encouraging Inventory Trends