Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion weakened significantly this quarter. Free cash flow and margin were lower compared to both the prior quarter and the same quarter last year.
- Revenue was lower than the prior quarter but slightly higher than a year ago. Operating cash flow decreased substantially, leading to a lower free cash flow and a narrower free cash flow margin, despite a reduction in capital expenditure.
- Compared to the prior quarter, all cash flow metrics were lower. Compared to the same quarter last year, revenue was higher but operating cash flow, free cash flow, and margin were lower.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$914.2M
Trailing twelve-month free cash flow.
Quarter free cash flow
$68.3M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$159.3M
Cash generated by operations before capital spending.
CapEx
$91.0M
Capital spending and related asset purchases.
FCF margin
2.5%
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 |
|---|---|---|---|---|---|
| 2023-07-29 | $2.5B | $123.9M | $95.0M | $28.9M | 1.1% |
| 2023-10-28 | $2.5B | -$70.8M | $106.3M | -$177.1M | -7.1% |
| 2024-02-03 | $3.6B | $1.1B | $124.2M | $994.0M | 28.0% |
| 2024-05-04 | $2.7B | $159.3M | $91.0M | $68.3M | 2.5% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 21.8% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 3.3% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | 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 decline
Operating cash flow was lower compared to both the prior quarter and the same quarter last year, driving a reduction in free cash flow and margin. This was the strongest observable factor in the quarter's cash conversion performance.
The decline in operating cash flow constrained free cash flow despite lower capital expenditure.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was lower than the prior quarter but slightly higher than a year ago. Operating cash flow decreased substantially, leading to a lower free cash flow and a narrower free cash flow margin, despite a reduction in capital expenditure.
Compared to the prior quarter, all cash flow metrics were lower. Compared to the same quarter last year, revenue was higher but operating cash flow, free cash flow, and margin were lower.
Monitor the trend in merchandise inventories and their effect on operating cash flow, as highlighted in the liquidity discussion.