Tags: GNC Holdings | GNC | retail | health | stocks

GNC Banks On Vitamins for Growth

By    |   Monday, 20 Jun 2011 12:36 PM

Time to ride the vitamin and supplement wellness wave? The niche is booming, spitting out high single-digit annual growth with no end in sight. GNC Holdings (GNC) is the industry leader by far. It has 7,300 stores, mostly in the United States, which sell vitamins, minerals, herbal supplements, and other health tonics. They’re sold under the GNC banner, and 43 percent of these retail sales are in a high-growth sub-category of sports nutrition.

To feed appetite for the stock, GNC launched an IPO this spring. During that offering, 22.5 million shares were sold at $16 apiece.

Analysts newly covering the company tout GNC’s fast-growing revenues, fed by store openings and higher same-store sales. First-quarter revenues rose 8.8 percent to $506 million, versus $465 million a year ago at GNC. Adjusted EBITDA rose 18.2 percent for the quarter.
GNC retail, franchise and manufacturing segments all posted strong first-quarter results. There’s more growth to come in 2011, including 100 more company-owned stores in the U.S. and 100 internationally.

Revamped strategy

Analysts see a bright future for GNC. Credit Suisse issued an outperform rating on GNC, citing its revamped strategy that includes stronger management, products, and infrastructure. GNC is set for multiyear, outsized earnings per share growth, Credit Suisse analysts wrote.

Morgan Stanley analysts agree. They think GNC can post 16 percent earnings per share growth annually for three to five years, citing its clear industry leadership in a booming industry.

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Time to ride the vitamin and supplement wellness wave? The niche is booming, spitting out high single-digit annual growth with no end in sight. GNC Holdings (GNC) is the industry leader by far. It has 7,300 stores, mostly in the United States, which sell vitamins, minerals,...
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2011-36-20
Monday, 20 Jun 2011 12:36 PM
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