Destination Maternity Corporation (DEST) swung to a net loss for the quarter ended Apr. 29, 2017. The company has made a net loss of $1.14 million, or $ 0.08 a share in the quarter, against a net profit of $4.04 million, or $0.30 a share in the last year period.

Revenue during the quarter dropped 14.47 percent to $106.43 million from $124.43 million in the previous year period. Gross margin for the quarter expanded 38 basis points over the previous year period to 54.44 percent. Operating margin for the quarter stood at negative 0.04 percent as compared to a positive 5.80 percent for the previous year period.

Operating loss for the quarter was $0.04 million, compared with an operating income of $7.22 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $6.27 million compared with $12.58 million in the prior year period. At the same time, adjusted EBITDA margin contracted 422 basis points in the quarter to 5.89 percent from 10.11 percent in the last year period.

Anthony M. Romano, chief executive officer & President, stated, "Our financial results in the first quarter were challenging and below expectations. While we are disappointed in these results, we have made tangible progress in a very difficult retail environment. Notably, we successfully re-launched our new eCommerce sites with minimal disruption and strong initial performance metrics, including a 40+% increase in conversion rate driving 18.8% web sales growth. Working capital improvements and reduced capital expenditures allowed us to reduce our debt, net of cash, by $10.5 million year-over-year and our focus on inventory management produced modest improvements in conversion and units per transaction. As we look ahead to the remainder of the year, we continue to believe we are positioned to drive improvement in sales and profitability, and we look forward to completing our proposed merger with Orchestra-Prémaman, which we expect to provide significant synergies and resources to allow us to accelerate our turnaround."

The company has spent $2.04 million cash to meet investing activities during the quarter as against cash outgo of $3.66 million in the last year period.

The company has spent $5.08 million cash to carry out financing activities during the quarter as against cash inflow of $11.28 million in the last year period.

Cash and cash equivalents stood at $2.33 million as on Apr. 29, 2017, down 38.45 percent or $1.45 million from $3.78 million on Apr. 30, 2016.

Working capital drops significantly
Destination Maternity Corporation has witnessed a decline in the working capital over the last year. It stood at $29.86 million as at Apr. 29, 2017, down 39.47 percent or $19.47 million from $49.33 million on Apr. 30, 2016. Current ratio was at 1.51 as on Apr. 29, 2017, down from 1.74 on Apr. 30, 2016.

Cash conversion cycle (CCC) has decreased to 39 days for the quarter from 98 days for the last year period. Days sales outstanding were almost stable at 7 days for the quarter, when compared with the last year period.

Days inventory outstanding has decreased to 69 days for the quarter compared with 119 days for the previous year period. At the same time, days payable outstanding went up to 37 days for the quarter from 29 for the same period last year.