GNC's main direct competitor, Vitamin Shoppe (NYSE: VSI), which faces many similar headwinds, is expected to post a 5% sales decline this fiscal year (which ended on Dec. 30) followed by flat growth next year.
Will Cannabis Products Bring Shoppers Back to GNC? GNC is still in serious trouble, and it's hard to see how its stock can recover without a buyout. The … GNC Operating Margin (TTM) data by YCharts. Independent of expectations and … Instead of focusing on an international expansion, Vitamin Shoppe is mainly focused on clearing out its excess inventory, closing weaker stores, and promoting its expanding portfolio of private brands. Lastly, GNC could be acquired by a Chinese company.
Those moves were aimed at widening its moat, but they clearly weighed down its operating margins. Quarterly revenue clearly beat expectations -- $18.3 billion, where Wall Street had predicted $18.2 billion. GNC's steep sell-off reduced its price-to-sales ratio to just 0.08 and its EV-to-sales ratio to 0.6. GNC's declining domestic comps were also exacerbated by the redemption of loyalty points over the past few quarters. See you at the top! Why is that? The Ascent is The Motley Fool's new personal finance brand devoted to helping you live a richer life. GNC Gross Profit Margin (TTM) data by YCharts. Sales declined 4% year over year, gross profit margins fell 570 basis points, and GAAP profits per share declined 25%. Oil supply and demand might not become rebalanced until well after the virus is contained.
GNC sells its own vitamins and health supplements alongside third-party products at its retail stores, many of which are located in malls. Its revenue declines in the second and third quarters were exacerbated by the Lucky Vitamin sale in the first quarter, but GNC's negative comps indicate that its core business is still struggling. I think its low valuation and high short interest levels will limit its downside potential at these prices, but I don't think it can stage a meaningful recovery in 2019. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Price target in 14 days: 15.266 USD. To buoy its sales growth, GNC used big markdowns and loyalty program promotions to drive sales. Tesla’s stock continues to rise to ridiculous heights. Here's how badly its same-store sales and top-line growth deteriorated over the past year. It's a long shot, but Amazon might buy GNC to complement its acquisition of online pharmacy PillPack, as well as its rumored plans to launch a "Prime Health" service.
So what So I guess you could call it a "mixed quarter" -- but was it really bad enough to justify an 11% haircut in stock price? Let's conquer your financial goals together...faster. Another earnings report shows that the revenue contraction is continuing and getting worse. Leo is a tech and consumer goods specialist who has covered the crossroads of Wall Street and Silicon Valley since 2012. First, there have been plenty of rumors about GNC buying Vitamin Shoppe.
However, the low prices could eliminate coal as a fuel, given its now relatively high cost versus oil.
Returns as of 11/06/2020. Source: GNC quarterly reports. Both the coronavirus pandemic and a Russia/Saudi Arabia price war have sent oil prices plummeting. YOY growth; comps exclude international sales. This has caused its gross margin to contract over the past few years.
Stock Advisor launched in February of 2002. Analysts expect GNC's revenue to fall 5% this fiscal year (which ended on Dec. 31) and drop another 2% next year. Despite all of the above, however, Intel was optimistic about where it's headed this year. During the third quarter, it reported a net loss of $8.6 million, compared to a profit of $21.1 million in the prior-year quarter. Vitamin Shoppe's earnings are expected to tumble 59% this year but possibly rebound next year as its margins improve.
This business model worked well when mall traffic was healthy and competitors like Walmart and Costco carried fewer supplements. Several lawsuits that questioned the safety and efficacy of its supplements tarnished the brand's reputation, and the suspension of its dividend in 2017 eliminated one of the last reasons to own the stock. Returns as of 11/06/2020. *Caused by the sale of its Lucky Vitamin brand. Check out the latest GNC Holdings earnings call transcript. Market data powered by FactSet and Web Financial Group. Invesco Stock Price Forecast, IVZ stock price prediction. GNC is still in serious trouble, and it's hard to see how its stock can recover without a buyout. A merger probably wouldn't solve the two retailers' problems overnight, but it could trigger short-squeezes on both stocks, pushing the prices up. GNC Holdings (NYSE:GNC) has lost over 90% of its market value over the past three years as competition from superstores, warehouse retailers, and e-tailers drained its sales and profits.
That pressure pushed GNC's bottom line into the red. U.S. regulators recently approved a $300 million strategic investment from China's Harbin Pharmaceutical in GNC to launch a new joint venture, which could lead to bigger investments or an eventual takeover. Cumulative Growth of a $10,000 Investment in Stock Advisor, Are the Bears Right About GNC Holdings? GNC Holdings (GNC) Q1 2019 Earnings Call Transcript, GNC Holdings' Rough Q3 Sends Investors Fleeing and Its Stock 19% Lower, Copyright, Trademark and Patent Information. There are plenty of reasons to bet against GNC, but the bears shouldn't ignore three potential catalysts. Let's conquer your financial goals together...faster. See you at the top! Its fundamentals don’t come close to justifying its price. Second, GNC sells its products on Amazon.com (NASDAQ: AMZN).
GNC expects the impact from loyalty programs to be "negligible" in the fourth quarter and beyond, but it didn't provide any clear comps guidance for that quarter or the full year. Despite having declined over 20% since the beginning of this year, at the current price of $16 per share, we believe HP Inc. could see further downside. As it turned out, Intel's GAAP number was $1.02 per share (a miss) but $1.11 per share pro forma (a beat). Both of GNC Holdings' key metrics, core domestic sales and GNC…
At the same time, GNC invested in the growth of its international operations, especially in China; its e-commerce platform (which only generated 7% of revenues in the US and Canada last quarter); and its loyalty program.
Giving new guidance for the full year fiscal 2020, Intel raised its estimates to $75.3 billion in sales, $4.55 per share in GAAP earnings, and $4.90 per share in pro forma profit. Integrated producers are apt to suffer less, but higher production costs in North America and the importance of the energy industry to the economies of the US, Mexico and Canada increase the chances of a downturn. I've been bearish on GNC for a long time, but I still think it's important to evaluate the headwinds and potential tailwinds for this beaten-down retailer.
@themotleyfool #stocks $GNC, GNC Declares Bankruptcy, Looks to Sell Business. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. After trading to its 2018 low of $10.14, the stock has stayed below its 200-day moving average and today is trading around this week's pivot of $11.08.
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