As the world's population continues its transition to healthier lifestyles, nutritional product manufacturers and retailers have reaped the benefits. GNC (GNC) and Vitamin Shoppe (VSI), two of the largest nutrition retailers in the world, have recently released their fourth-quarter reports and allowed investors to take the pulse of the industry. Let's compare their results and outlooks on the year ahead to determine which company had the better quarter and which could provide the highest returns going forward.

Source: Author.

The quarterly results
On Feb. 13, GNC released its fourth-quarter report for fiscal 2013. Here's a breakdown of the results and a year-over-year comparison:

Earnings per share $0.50 $0.64
Revenue $613.70 million $631.51 million
  • Earnings per share increased 6.4%
  • Revenue increased 8.6%
  • Same-store sales:
    •  5% growth in domestic company-owned stores
    •  3.3% growth in domestic franchised locations
  • Gross profit increased 6% to $227.2 million
  • Gross margin declined 93 basis points to 37.01%
  • Other most notable update: GNC reached an agreement with a company named Rusvit to open the first GNC locations in Russia. The expansion will begin in Moscow with stores, kiosks, and store-within-a-store formats in premier retail locations.

Feb. 25 brought Vitamin Shoppe's fourth-quarter report for fiscal 2013. Here's a breakdown of the report and a year-over-year comparison:

Earnings per share $0.37 $0.37
Revenue $256.40 million $253.32 million
  • Earnings per share increased 15.6%
  • Revenue increased 17.2%
  • Same-stores sales:
    • 4.6% growth 
    • 6.2% growth including e-commerce sales
  • Gross profit increased 12.2% to $85.69 million
  • Gross margin declined 150 basis points to 33.4%
  • Other most notable update: Vitamin Shoppe opened a new distribution center in Ashland, Va. This will serve as the flagship distribution center for the East Coast and will help reduce costs associated with shipping. It will also enable faster deliveries of online orders.

Outlook on the year
In its fourth-quarter report, GNC provided its initial outlook on fiscal 2014, and it is very disappointing. Here's what the company expects to see in comparison with the consensus analyst estimate:

MetricGNC's OutlookAnalyst Estimate
Earnings per share $3.18-$3.24 $3.46

As you can see, GNC's earnings outlook came in well below analysts' expectations, as it called for growth of just 11.6%-13.7%. The company added that it expects high single-digit revenue growth, which was also below analysts' expected range. GNC said it faced a "challenging" retail environment in the fourth quarter and the challenges have continued in the first two months of 2014, which led to the weak forecast for the year. The earnings miss and weak guidance caused GNC's stock to fall more than 14% on the day of the release, and its shares have yet to fully recover.

In its own report, Vitamin Shoppe did not provide specific earnings or revenue expectations for fiscal 2014, but it did say that it expects to see same-store sales growth in the low to mid single digits and the openings of approximately 60 new stores. For comparison's sake, we will use the consensus analyst estimate for 2014, which looks like this:

MetricAnalyst EstimateFiscal 2013 Results
Earnings per share $2.53 $2.18
Revenue $1.2 billion $1.09 billion

These estimates call for earnings per share to increase 16.1% and revenue to increase 10.1% year over year, and they are supported by the company's same-store sales expectations. Vitamin Shoppe did note a "challenging retail environment to date" in 2014, but this has not caused a major impact on its outlook for the year ahead. Overall, the forecast for 2014 would result in another great year for the company and I believe it would support a continued rally higher. 

And the winner is...
After comparing these companies' quarterly reports and outlooks on fiscal 2014, Vitamin Shoppe wins by a landslide. Its earnings per share were in line with expectations and its revenue exceeded expectations, as it showed strength even while hundreds of its stores faced intense storms and cold weather during the quarter. I believe Vitamin Shoppe is the best investment opportunity in the nutrition retail industry today, so Foolish investors looking for exposure to the company should strongly consider initiating positions now.