Duluth Holdings Inc. (DLTH) has reported 69.38 percent plunge in profit for the quarter ended Oct. 30, 2016. The company has earned $0.46 million, or $0.01 a share in the quarter, compared with $1.51 million, or $0.06 a share for the same period last year.

Revenue during the quarter grew 21.18 percent to $67.01 million from $55.30 million in the previous year period. Gross margin for the quarter expanded 67 basis points over the previous year period to 57.83 percent. Total expenses were 98.78 percent of quarterly revenues, up from 97.02 percent for the same period last year. That has resulted in a contraction of 175 basis points in operating margin to 1.22 percent.

Operating income for the quarter was $0.82 million, compared with $1.65 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $2.47 million compared with $2.68 million in the prior year period. At the same time, adjusted EBITDA margin contracted 116 basis points in the quarter to 3.69 percent from 4.85 percent in the last year period.

"While we have achieved 27 consecutive quarters of increased net sales year-over-year, third-quarter net sales fell short of our expectations. In the latter part of September and through the quarter end in October, we experienced unusually warm weather that extended across the country and this had an impact on our total net sales for the third quarter. This unseasonable weather, coupled with a highly promotional environment, continued into early fourth quarter. As a result, we are revising our 2016 fiscal full-year guidance and now expect net sales in the range of $360 million to $370 million, with corresponding revisions to our EPS and Adjusted EBITDA," said Stephanie Pugliese, chief executive officer of Duluth Trading.
 

For fiscal year 2016, DULUTH forecasts revenue to be in the range of $360 million to $370 million. The company expects diluted earnings per share to be in the range of $0.52 to $0.60.

The company has spent $22.47 million cash to meet investing activities during the nine month period as against cash outgo of $6.61 million in the last year period.

Cash flow from financing activities was $11.56 million for the nine month period, down 28.68 percent or $4.65 million, when compared with the last year period.

Cash and cash equivalents stood at $0.17 million as on Oct. 30, 2016, down 17.22 percent or $0.04 million from $0.21 million on Nov. 01, 2015.
 

Working capital increases sharply
Duluth Holdings Inc. has recorded an increase in the working capital over the last year. It stood at $69.46 million as at Oct. 30, 2016, up 43.06 percent or $20.91 million from $48.55 million on Nov. 01, 2015. Current ratio was at 2.79 as on Oct. 30, 2016, up from 2.50 on Nov. 01, 2015.

Cash conversion cycle (CCC) has increased to 127 days for the quarter from 99 days for the last year period. Days sales outstanding went up to 2 days for the quarter compared with 1 days for the same period last year.

Days inventory outstanding has increased to 156 days for the quarter compared with 140 days for the previous year period. At the same time, days payable outstanding went down to 31 days for the quarter from 41 for the same period last year.