Vitamin Shoppe, Inc. (VSI) has reported a 19.40 percent fall in profit for the quarter ended Sep. 24, 2016. The company has earned $11.36 million, or $0.48 a share in the quarter, compared with $14.10 million, or $0.48 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $11.80 million, or $0.50 a share compared with $15.10 million or $0.52 a share, a year ago.
Revenue during the quarter went up marginally by 0.32 percent to $314.89 million from $313.89 million in the previous year period. Gross margin for the quarter contracted 93 basis points over the previous year period to 32.43 percent. Total expenses were 93.56 percent of quarterly revenues, up from 92.56 percent for the same period last year. That has resulted in a contraction of 100 basis points in operating margin to 6.44 percent.
Operating income for the quarter was $20.27 million, compared with $23.36 million in the previous year period.
However, the adjusted operating income for the quarter stood at $21.60 million compared to $25 million in the prior year period. At the same time, adjusted operating margin contracted 111 basis points in the quarter to 6.86 percent from 7.96 percent in the last year period.
Commenting on the quarter's results, Colin Watts, chief executive officer of the Vitamin Shoppe stated, "Third quarter results were generally in line with our expectations. Product margins improved as we reduced our promotional activity in the quarter, but the top line continues to be soft with lower comparable store sales."
For financial year 2016, the company projects diluted earnings per share to be in the range of $1.89 to $1.99. The company projects diluted earnings per share to be in the range of $2.10 to $2.20 on adjusted basis.
Working capital remains almost stable
Working capital of Vitamin Shoppe, Inc. remained almost stable for the quarter at $145.21 million, when compared with the previous year period. Current ratio was at 2.24 as on Sep. 24, 2016, up from 2.23 on Sep. 26, 2015.
Cash conversion cycle (CCC) has decreased to 30 days for the quarter from 77 days for the last year period. Days sales outstanding were almost stable at 2 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 48 days for the quarter compared with 93 days for the previous year period. At the same time, days payable outstanding went up to 19 days for the quarter from 18 for the same period last year.
Debt increases substantially
Vitamin Shoppe, Inc. has witnessed an increase in total debt over the last one year. It stood at $125.41 million as on Sep. 24, 2016, up 1,467.66 percent or $117.41 million from $8 million on Sep. 26, 2015. Long-term debt stood at $119.41 million as on Sep. 24, 2016. Total debt was 17.03 percent of total assets as on Sep. 24, 2016, compared with 1.09 percent on Sep. 26, 2015. Debt to equity ratio was at 0.27 as on Sep. 24, 2016, up from 0.01 as on Sep. 26, 2015. Interest coverage ratio deteriorated to 8.58 for the quarter from 135.80 for the same period last year.
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