Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
McCormick's fiscal fourth quarter showed a marked improvement in cash conversion, with free cash flow rising notably from both the prior quarter and the same quarter last year. The gain was driven by stronger operating cash flows despite a moderate increase in capital spending compared to the preceding period.
- Revenue increased sequentially, and operating cash flow rose sharply from the prior quarter, leading to a free cash flow margin that improved noticeably from both comparison periods. Capital expenditure increased slightly from the previous quarter but was essentially stable compared with the same period a year earlier.
- Compared with the preceding quarter, all key cash metrics strengthened significantly, with free cash flow margin improving substantially. Versus the same quarter one year ago, revenue, operating cash flow, and free cash flow were all higher, while capital expenditure was slightly lower, contributing to an improved free cash flow margin.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$740.4M
Trailing twelve-month free cash flow.
Quarter free cash flow
$458.3M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$542.0M
Cash generated by operations before capital spending.
CapEx
$83.7M
Capital spending and related asset purchases.
FCF margin
24.8%
The share of revenue converted into free cash flow.
Cash flow trend
A short quarterly history shows whether FCF is scaling with revenue or only spiking for one period.
| Period | Revenue | Operating CF | CapEx | FCF | FCF margin |
|---|---|---|---|---|---|
| 2025-02-28 | $1.6B | $115.5M | $37.1M | $78.4M | 4.9% |
| 2025-05-31 | $1.7B | $45.9M | $48.3M | -$2.4M | -0.1% |
| 2025-08-31 | $1.7B | $258.8M | $52.7M | $206.1M | 11.9% |
| 2025-11-30 | $1.9B | $542.0M | $83.7M | $458.3M | 24.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 202.3% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 4.5% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$3.5B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Operating Cash Flow Strength
Operating cash flow posted a substantial sequential increase and also rose compared with the prior year, providing the primary lift to free cash flow. The improvement in cash generation was broad-based, supported by revenue growth and efficient cash conversion.
A strong operating cash flow engine gives the company financial flexibility to invest in growth initiatives while maintaining a healthy free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue increased sequentially, and operating cash flow rose sharply from the prior quarter, leading to a free cash flow margin that improved noticeably from both comparison periods. Capital expenditure increased slightly from the previous quarter but was essentially stable compared with the same period a year earlier.
Compared with the preceding quarter, all key cash metrics strengthened significantly, with free cash flow margin improving substantially. Versus the same quarter one year ago, revenue, operating cash flow, and free cash flow were all higher, while capital expenditure was slightly lower, contributing to an improved free cash flow margin.
Monitor the impact of the post-quarter acquisition of an additional interest in the Mexican joint venture, which will require cash outflows not reflected in the current quarter's free cash flow.