What happened
Shares of GNC Holdings (GNC +0.00%) have gotten crushed today, down by 11% as of 11:30 a.m. EDT, after the company reported third-quarter earnings. The supplement retailer missed analyst expectations on the bottom line.
So what
Revenue in the third quarter totaled $609.5 million, down from $628 million a year ago. Same-store sales rose 1.3% at domestic company-owned stores, although comps at domestic franchise locations fell 1.7%. Adjusted earnings per share came in at $0.32, which was shy of the consensus estimate of $0.33 per share in adjusted profits. GNC estimated that Hurricanes Harvey, Irma, and Maria adversely impacted profitability by approximately $0.02 per share.
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Transactions grew 12.4% during the quarter, and GNC now has 9.6 million members in its loyalty programs. GNC continues to expand into e-commerce and recently launched a storefront on Amazon.com. At the end of the quarter, GNC had 3,468 corporate stores in the U.S. and Canada and 1,126 domestic franchise locations.
Now what
"GNC made good progress in the third quarter, retuning to positive same store sales. Transactions, the e-commerce business and enrollment in our new loyalty programs continued to improve, and it is clear that our strengthened model is creating a solid foundation for growth," said CEO Ken Martindale (who was named permanent CEO in September) in a statement. "This year, the team laid a strong foundation for us to build upon. Going forward, we will continue to focus on growing sales and on giving customers innovative, highly differentiated products and experiences."
GNC closed its sale of Lucky Vitamin at the end of the quarter, which it sold for $7.1 million and resulted in a $1.7 million loss. GNC launched a supply chain initiative at the end of last year, which is already helping drive inventory efficiencies, including a $40 million reduction in inventory at the end of the third quarter.
