GNC Holdings (NYSE:GNC) stock climbed 17.9% in January, according to data provided by S&P Global Market Intelligence. The share price of the supplements retailer spiked following the release of preliminary fourth-quarter sales results indicating better-than-anticipated performance.
GNC published a sales report on Jan. 18 that indicated its same-store sales for the December-ended quarter would increase 5.7% year over year. The report also guided for earnings between $0.24 and $0.25, up from $0.07 in the prior-year period -- prompting shares to gain roughly 52% in the day's trading.
The beaten-down retailer's share price has struggled amid increased online competition and fears of a potential bankruptcy, but the recent sales data and efforts to build its business overseas have created pricing momentum. The chart below shows GNC's stock performance over the last year:
GNC published fourth-quarter earnings on Feb. 13, delivering on the 5.7% same-store sales growth it had outlined in its preliminary report, and recording $0.25 in adjusted earnings per share. After recent pricing upswings, the company is valued at just 4 times forward earnings estimates and 0.18 times forward sales. Those are metrics that might pique the interest of value-focused investors, but a challenging retail climate for brick-and-mortar outlets and pressure from Amazon and other online-based competitors paint a dim picture for the business's long-term outlook.
To its credit, GNC seems to recognize these threats and isn't standing still. The company recently announced a deal with Harbin Pharmaceutical that will further the manufacturing and sale of GNC products in China. The deal also includes a $300 million investment from Harbin that makes the Chinese company the largest shareholder in GNC.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends AMZN. The Motley Fool has a disclosure policy.