UniFirst Corporation (UNF) has reported a 21.39 percent fall in profit for the quarter ended Nov. 26, 2016. The company has earned $28.21 million, or $1.38 a share in the quarter, compared with $35.89 million, or $1.78 a share for the same period last year.
Revenue during the quarter grew 3.41 percent to $386.11 million from $373.38 million in the previous year period. Gross margin for the quarter contracted 222 basis points over the previous year period to 38.16 percent. Total expenses were 88.15 percent of quarterly revenues, up from 84.39 percent for the same period last year. That has resulted in a contraction of 376 basis points in operating margin to 11.85 percent.
Operating income for the quarter was $45.76 million, compared with $58.29 million in the previous year period.
Ronald D. Croatti, UniFirst president and chief executive officer said, "First quarter growth was affected by the loss of uniform wearers and customers in North American energy-dependent markets. However, we are encouraged by recent trends in these markets. Wearer levels at the existing customers have shown improvement which suggests energy-related headwinds may be subsiding. If these trends continue, our organic growth rates should improve as fiscal 2017 unfolds."
For financial year 2017, UniFirst Corporation projects revenue to be in the range of $1,550 million to $1,565 million. It forecasts diluted earnings per share to be in the range of $4.85 to $5 for the same period.
Operating cash flow improves
UniFirst Corporation has generated cash of $63.50 million from operating activities during the quarter, up 10.16 percent or $5.86 million, when compared with the last year period.
The company has spent $138.34 million cash to meet investing activities during the quarter as against cash outgo of $20.90 million in the last year period.
The company has spent $0.36 million cash to carry out financing activities during the quarter as against cash outgo of $1.10 million in the last year period.
Cash and cash equivalents stood at $286.12 million as on Nov. 26, 2016, down 8.16 percent or $25.41 million from $311.53 million on Nov. 28, 2015.
Working capital increases
UniFirst Corporation has recorded an increase in the working capital over the last year. It stood at $553.16 million as at Nov. 26, 2016, up 7.76 percent or $39.85 million from $513.32 million on Nov. 28, 2015. Current ratio was at 4.66 as on Nov. 26, 2016, up from 3.56 on Nov. 28, 2015.
Cash conversion cycle (CCC) has decreased to 34 days for the quarter from 49 days for the last year period. Days sales outstanding were almost stable at 39 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 14 days for the quarter compared with 32 days for the previous year period. At the same time, days payable outstanding went down to 19 days for the quarter from 22 for the same period last year.
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