Vista Outdoor (VSTO) swung to a net loss for the quarter ended Jan. 01, 2017. The company has made a net loss of $377.66 million, or $ 6.44 a share in the quarter, against a net profit of $43.16 million, or $0.70 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $36.40 million, or $0.62 a share compared with $43.64 million or $0.70 a share, a year ago.

Revenue during the quarter grew 10.29 percent to $653.56 million from $592.56 million in the previous year period. Gross margin for the quarter contracted 247 basis points over the previous year period to 25.80 percent. Operating margin for the quarter stood at negative 58.86 percent as compared to a positive 12.70 percent for the previous year period.

Operating loss for the quarter was $384.66 million, compared with an operating income of $75.23 million in the previous year period.

However, the adjusted operating income for the quarter stood at $65.40 million compared to $76 million in the prior year period. At the same time, adjusted operating margin contracted 282 basis points in the quarter to 10.01 percent from 12.83 percent in the last year period.

"The acceleration of current market challenges has led the company to update FY17 financial guidance," said Vista Outdoor chief financial officer Stephen Nolan. "For the full year, we expect gross margins to be roughly in line with the third quarter results. While we will release formal guidance for FY18 during our May earnings call, we do expect the revenue and margin pressures we are experiencing in the back half of FY17 to continue into next year. Despite the pressures this year and next, the company is committed to a value-creating capital deployment strategy, long-term sales growth and margin improvement, and delivering long-term value to our shareholders."

For financial year 2017, Vista Outdoor expects revenue to be in the range of $2,500 million to $2,540 million.  The company projects diluted loss per share to be in the range of $4.57 to $4.42. The company projects diluted earnings per share to be in the range of $1.95 to $2.10 on adjusted basis.

The company has spent $507.36 million cash to meet investing activities during the nine month period as against cash outgo of $487.72 million in the last year period. It has incurred net capital expenditure of $49.21 million on net basis during the nine month period, up 92.19 percent or $23.61 million from year ago period.

Cash flow from financing activities was $339.92 million for the nine month period, up 51.45 percent or $115.47 million, when compared with the last year period.

Cash and cash equivalents stood at $40.84 million as on Jan. 01, 2017, down 42.59 percent or $30.29 million from $71.13 million on Jan. 03, 2016.

Working capital declines
Vista Outdoor has witnessed a decline in the working capital over the last year. It stood at $619.19 million as at Jan. 01, 2017, down 13.87 percent or $99.73 million from $718.93 million on Jan. 03, 2016. Current ratio was at 2.07 as on Jan. 01, 2017, down from 3.09 on Jan. 03, 2016.

Cash conversion cycle (CCC) has decreased to 98 days for the quarter from 144 days for the last year period. Days sales outstanding went up to 65 days for the quarter compared with 64 days for the same period last year.

Days inventory outstanding has decreased to 55 days for the quarter compared with 105 days for the previous year period. At the same time, days payable outstanding went down to 22 days for the quarter from 25 for the same period last year.