Why GNC Shares Popped

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of fitness specialist GNC (NYSE: GNC  ) were getting pumped up today, gaining as much as 10% after reporting an impressive quarter.

So what: GNC was two out of three in its earnings report. The health supplement retailer beat earnings estimates by $0.04 cents, with a $0.50 EPS, but missed on revenue expectations. Sales increased 10.9% to $565 million, but that was still short of Wall Street's view at $573.6 million. Same-store sales at domestic locations increased 7.1%, and were up by 11.4% at franchise locations, both strong numbers. Guidance also topped the experts' projections as management sees EPS of $2.75-$2.80 in 2013. The consensus was at $2.72.

Now what: CEO Joe Fortunato touted the company's strong performance in 2012, noting improvements in market share and operating margins, and expanding the customer base. The increase in comparable sales is generally a good indicator of continuing growth, and the fifth quarter in a row that GNC has beaten estimates. The company appears to be firing on all cylinders, and I'd expect a strong 2013 from the retailer.

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Related Tickers

9/26/2016 11:28 AM
GNC $19.92 Down -0.23 -1.14%
GNC Holdings CAPS Rating: ***