Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
This quarter's free cash flow margin improved sequentially but declined compared to the same quarter last year. Revenue and operating cash flow were lower year over year, while capital expenditure decreased.
- The company converted revenue into free cash flow at a margin that was higher than the prior quarter but lower than the year-ago period. Operating cash flow fell relative to the prior year, while capital spending was also lower, resulting in a narrower free cash flow margin.
- Compared to the preceding quarter, revenue and operating cash flow were higher, leading to improved free cash flow. Versus the same quarter one year earlier, all metrics were lower, with free cash flow margin weakening notably.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$1.3B
Trailing twelve-month free cash flow.
Quarter free cash flow
$215.1M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$246.5M
Cash generated by operations before capital spending.
CapEx
$31.4M
Capital spending and related asset purchases.
FCF margin
12.0%
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 |
|---|---|---|---|---|---|
| 2023-10-29 | $1.9B | $290.4M | $42.0M | $248.5M | 13.4% |
| 2024-01-28 | $2.3B | $674.9M | $53.6M | $621.2M | 27.3% |
| 2024-04-28 | $1.7B | $226.8M | $39.5M | $187.3M | 11.3% |
| 2024-07-28 | $1.8B | $246.5M | $31.4M | $215.1M | 12.0% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 99.2% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 1.8% | 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.
Year-over-year cash flow contraction
Free cash flow and operating cash flow were lower compared to the same quarter last year, despite reduced capital expenditure. The filing notes that the revenue decline was driven by customer hesitancy towards furniture purchases, partially offset by strength in emerging brands and children's home furnishings.
The lower free cash flow margin may constrain future investment capacity.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
The company converted revenue into free cash flow at a margin that was higher than the prior quarter but lower than the year-ago period. Operating cash flow fell relative to the prior year, while capital spending was also lower, resulting in a narrower free cash flow margin.
Compared to the preceding quarter, revenue and operating cash flow were higher, leading to improved free cash flow. Versus the same quarter one year earlier, all metrics were lower, with free cash flow margin weakening notably.
Monitor whether the trend of lower capital expenditure relative to operating cash flow persists.