GNC Holdings, Inc (GNC) has reported a 53.07 percent plunge in profit for the quarter ended Mar. 31, 2017. The company has earned $23.85 million, or $0.35 a share in the quarter, compared with $50.82 million, or $0.69 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $25.09 million, or $0.37 a share compared with $50.81 million or $0.69 a share, a year ago. Revenue during the quarter dropped 3.60 percent to $644.84 million from $668.90 million in the previous year period. Gross margin for the quarter contracted 223 basis points over the previous year period to 33.03 percent. Total expenses were 91.70 percent of quarterly revenues, up from 85.94 percent for the same period last year. That has resulted in a contraction of 576 basis points in operating margin to 8.30 percent.
Operating income for the quarter was $53.55 million, compared with $94.06 million in the previous year period.
"The One New GNC, represents a fundamental change in our business model and in the first quarter of 2017, we saw those transformational changes begin to bear fruit," said Bob Moran, Interim chief executive officer. "We're encouraged by positive trends in transactions, and by the early performance of our new loyalty programs, which are demonstrating their power to increase consumer frequency and spending."
Operating cash flow drops significantly
GNC Holdings, Inc has generated cash of $46.10 million from operating activities during the quarter, down 67.61 percent or $ 96.22 million, when compared with the last year period. The company has spent $12.66 million cash to meet investing activities during the quarter as against cash outgo of $10.23 million in the last year period.
The company has spent $28.37 million cash to carry out financing activities during the quarter as against cash outgo of $128.35 million in the last year period.
Cash and cash equivalents stood at $39.87 million as on Mar. 31, 2017, down 34.63 percent or $21.13 million from $61 million on Mar. 31, 2016.
Working capital increases
GNC Holdings, Inc has recorded an increase in the working capital over the last year. It stood at $490.13 million as at Mar. 31, 2017, up 10.49 percent or $46.54 million from $443.59 million on Mar. 31, 2016. Current ratio was at 2.57 as on Mar. 31, 2017, up from 2.21 on Mar. 31, 2016.
Cash conversion cycle (CCC) has decreased to 44 days for the quarter from 98 days for the last year period. Days sales outstanding were almost stable at 19 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 63 days for the quarter compared with 118 days for the previous year period. At the same time, days payable outstanding was almost stable at 37 days for the quarter, when compared with the previous year period.
Debt comes down marginally
GNC Holdings, Inc has recorded a decline in total debt over the last one year. It stood at $1,515.38 million as on Mar. 31, 2017, down 1.66 percent or $25.56 million from $1,540.94 million on Mar. 31, 2016. Total debt was 73.47 percent of total assets as on Mar. 31, 2017, compared with 60.25 percent on Mar. 31, 2016. D
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