Revenue during the quarter dropped 14.19 percent to $102.58 million from $119.55 million in the previous year period. Gross margin for the quarter expanded 240 basis points over the previous year period to 52.92 percent. Operating margin for the quarter stood at negative 1.43 percent as compared to a negative 1.42 percent for the previous year period.

Operating loss for the quarter was $1.47 million, compared with an operating loss of $1.70 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $4.24 million compared with $4.05 million in the prior year period. At the same time, adjusted EBITDA margin improved 75 basis points in the quarter to 4.13 percent from 3.39 percent in the last year period.

Anthony M. Romano, Chief Executive Officer & President stated, “While we continue to make progress on many of our initiatives, the third quarter was challenging as both our sales and earnings did not meet our expectations. Our third quarter results do reflect continued improvement in gross profit margin and reduction in SG&A driven by the ongoing traction of our strategic initiatives. Overall, sales and adjusted EBITDA trailed the year ago period reflecting reductions in leased department and licensed brand sales and were adversely impacted by sales disruption from both the Hanjin shipping bankruptcy and Hurricane Matthew. Our efforts over the past two years have provided significant improvement in our culture, in our focus on the customer, and in our overall retail disciplines, with improved tools and enhanced visibility. This, in turn, has led to improved product assortment, elevated visual imagery both in stores and online, more disciplined inventory management, faster lead times and better product flow. While these improvements are not entirely visible in our latest quarter results, year-to-date earnings are improved and I remain confident that we are working on the right areas and are focused on the right strategic growth and efficiency initiatives to place us on the right path to deliver sustained long-term success.”

The company has spent $9.69 million cash to meet investing activities during the nine month period as against cash outgo of $24.06 million in the last year period. It has incurred net capital expenditure of $9.61 million on net basis during the nine month period, down 59.79 percent or $14.30 million from year ago period.

Cash flow from financing activities was $5.30 million for the nine month period, down 76.32 percent or $17.08 million, when compared with the last year period.

Cash and cash equivalents stood at $2.76 million as on Oct. 29, 2016, up 33.40 percent or $0.69 million from $2.07 million on Oct. 31, 2015.

Working capital increases sharply
Destination Maternity Corporation has recorded an increase in the working capital over the last year. It stood at $46.89 million as at Oct. 29, 2016, up 122.72 percent or $25.84 million from $21.06 million on Oct. 31, 2015. Current ratio was at 1.78 as on Oct. 29, 2016, up from 1.22 on Oct. 31, 2015.

Cash conversion cycle (CCC) has decreased to 43 days for the quarter from 91 days for the last year period. Days sales outstanding were almost stable at 8 days for the quarter, when compared with the last year period.

Days inventory outstanding has decreased to 69 days for the quarter compared with 118 days for the previous year period. At the same time, days payable outstanding was almost stable at 34 days for the quarter, when compared with the previous year period.