We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
GNC Holdings, Inc. (GNC - Free Report) reported second-quarter 2019 adjusted earnings per share of 13 cents, down 35% from the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate by 85.7%.
Reported earnings per share for the quarter came in at 11 cents, down 31.25% year over year.
Revenues
Revenues for the second quarter came in at $534 million, down 13.6% year over year. The top line missed the Zacks Consensus Estimate by 2.9%.
Segmental Details
GNC Holdings reports operations under three segments — U.S. & Canada (including company-owned stores in the United States, Puerto Rico and Canada, franchise stores in the United States, and e-commerce), International (inclusive of franchise locations in approximately 50 countries, The Health Store and China operations) and Manufacturing/Wholesale (comprising manufactured products sold to other segments, third-party contract manufacturing and sales to wholesale partners).
GNC Holdings, Inc. Price, Consensus and EPS Surprise
During the reported quarter, GNC Holdings’ revenues from the U.S. & Canada segment fell 8% year over year to $476.1 million. Notably, e-commerce sales accounted for 8.1% of U.S. and Canada revenues, decreasing from 8.3% in the prior-year quarter.
Company-owned net store closures negatively impacted revenues by $14.9 million. Further, a decline of 4.6% in same-store sales led to a fall of $17.5 million in revenues of this segment. Moreover, in domestic franchise locations, same-store sales decreased 1.8% from the year-ago period.
Revenues in the International segment declined 18.9% to $40.9 million for the quarter under review. This downside can be primarily attributed to transfer of the China business to the newly formed joint venture, effective Feb 13, 2019.However, the decline was partially offset by a $0.7-million increase in sales of the company’s international franchisees.
Revenues in the Manufacturing / Wholesale segment registered year-over-year plunge of 64.4% to $18.5 million, excluding intersegment sales. This was mainly due to the transfer of the Nutra manufacturing business to the newly formed manufacturing joint venture with International Vitamin Corporation, effective Mar 1, 2019.
Margins
Gross profit declined 6.7% year over year to $193.7 million. Gross margin expanded 266 bps to 36.3% in the second quarter.
Selling, general and administrative expenses declined 9.3% to $143.8 million. Adjusted operating profit rose 1.4% to $49.9 million and adjusted operating margin expanded 138 bps to 9.3%.
Financial Position
GNC Holdings exited the second quarter with cash and cash equivalents of $95.9 million compared to $137.1 million at the end of the first quarter. Long-term debt was $854.7 million in the quarter under review, down from $888.4 million at the end of the previous quarter.
Year-to-date net cash flow from operating activities totaled $65.3 million compared with $49.1 million from the year-ago period.
Further, the company generated year-to-date free cash flow of $58.9 million compared with $40.8 million in the prior-year quarter.
Our Take
GNC Holdings exited the second quarter of 2019 on a mixed note, as the bottom line surpassed the Zacks Consensus Estimate, while revenues lagged the same.
Each of the three operating segments reported year-over-year sales decline. Despite the negatives, we are optimistic about some second-quarter developments. For instance,the recently launched Lit AF, an enhanced, next-generation, pre-workout dietary supplement in the $135-million Beyond Raw GNC brand, buoys optimism.
We are encouraged to note the expansion of both the margins in the quarter.
Zacks Rank & Key Picks
GNC Holdings currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader medical space are Hologic Inc. (HOLX - Free Report) , DENTSPLY SIRONA Inc. (XRAY - Free Report) and Teleflex Inc. (TFX - Free Report) .
Hologic is scheduled to release second-quarter 2019 results on Jul 31. The Zacks Consensus Estimate for adjusted EPS is pegged at 61 cents and for revenues stands at $834.6 million. The stock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DENTSPLY SIRONA is scheduled to release second-quarter 2019 results on Aug 2. The Zacks Consensus Estimate for the period’s adjusted EPS is 62 cents and for revenues $1.03 billion. The stock sports a Zacks Rank #1.
Teleflex is expected to release second-quarter 2019 results on Aug 1. The Zacks Consensus Estimate for adjusted EPS in the to-be-reported quarter is $2.59 and for the top line $636.7 million. The stock has a Zacks Rank of 2.
Radical New Technology Creates $12.3 Trillion Opportunity
Imagine buying Microsoft stock in the early days of personal computers… or Motorola after it released the world’s first cell phone. These technologies changed our lives and created massive profits for investors. Today, we’re on the brink of the next quantum leap in technology. 7 innovative companies are leading this “4th Industrial Revolution” - and early investors stand to earn the biggest profits.
Image: Bigstock
GNC Holdings (GNC) Q2 Earnings Beat Estimates, Margins Expand
GNC Holdings, Inc. (GNC - Free Report) reported second-quarter 2019 adjusted earnings per share of 13 cents, down 35% from the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate by 85.7%.
Reported earnings per share for the quarter came in at 11 cents, down 31.25% year over year.
Revenues
Revenues for the second quarter came in at $534 million, down 13.6% year over year. The top line missed the Zacks Consensus Estimate by 2.9%.
Segmental Details
GNC Holdings reports operations under three segments — U.S. & Canada (including company-owned stores in the United States, Puerto Rico and Canada, franchise stores in the United States, and e-commerce), International (inclusive of franchise locations in approximately 50 countries, The Health Store and China operations) and Manufacturing/Wholesale (comprising manufactured products sold to other segments, third-party contract manufacturing and sales to wholesale partners).
GNC Holdings, Inc. Price, Consensus and EPS Surprise
GNC Holdings, Inc. price-consensus-eps-surprise-chart | GNC Holdings, Inc. Quote
During the reported quarter, GNC Holdings’ revenues from the U.S. & Canada segment fell 8% year over year to $476.1 million. Notably, e-commerce sales accounted for 8.1% of U.S. and Canada revenues, decreasing from 8.3% in the prior-year quarter.
Company-owned net store closures negatively impacted revenues by $14.9 million. Further, a decline of 4.6% in same-store sales led to a fall of $17.5 million in revenues of this segment. Moreover, in domestic franchise locations, same-store sales decreased 1.8% from the year-ago period.
Revenues in the International segment declined 18.9% to $40.9 million for the quarter under review. This downside can be primarily attributed to transfer of the China business to the newly formed joint venture, effective Feb 13, 2019.However, the decline was partially offset by a $0.7-million increase in sales of the company’s international franchisees.
Revenues in the Manufacturing / Wholesale segment registered year-over-year plunge of 64.4% to $18.5 million, excluding intersegment sales. This was mainly due to the transfer of the Nutra manufacturing business to the newly formed manufacturing joint venture with International Vitamin Corporation, effective Mar 1, 2019.
Margins
Gross profit declined 6.7% year over year to $193.7 million. Gross margin expanded 266 bps to 36.3% in the second quarter.
Selling, general and administrative expenses declined 9.3% to $143.8 million. Adjusted operating profit rose 1.4% to $49.9 million and adjusted operating margin expanded 138 bps to 9.3%.
Financial Position
GNC Holdings exited the second quarter with cash and cash equivalents of $95.9 million compared to $137.1 million at the end of the first quarter. Long-term debt was $854.7 million in the quarter under review, down from $888.4 million at the end of the previous quarter.
Year-to-date net cash flow from operating activities totaled $65.3 million compared with $49.1 million from the year-ago period.
Further, the company generated year-to-date free cash flow of $58.9 million compared with $40.8 million in the prior-year quarter.
Our Take
GNC Holdings exited the second quarter of 2019 on a mixed note, as the bottom line surpassed the Zacks Consensus Estimate, while revenues lagged the same.
Each of the three operating segments reported year-over-year sales decline. Despite the negatives, we are optimistic about some second-quarter developments. For instance,the recently launched Lit AF, an enhanced, next-generation, pre-workout dietary supplement in the $135-million Beyond Raw GNC brand, buoys optimism.
We are encouraged to note the expansion of both the margins in the quarter.
Zacks Rank & Key Picks
GNC Holdings currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader medical space are Hologic Inc. (HOLX - Free Report) , DENTSPLY SIRONA Inc. (XRAY - Free Report) and Teleflex Inc. (TFX - Free Report) .
Hologic is scheduled to release second-quarter 2019 results on Jul 31. The Zacks Consensus Estimate for adjusted EPS is pegged at 61 cents and for revenues stands at $834.6 million. The stock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DENTSPLY SIRONA is scheduled to release second-quarter 2019 results on Aug 2. The Zacks Consensus Estimate for the period’s adjusted EPS is 62 cents and for revenues $1.03 billion. The stock sports a Zacks Rank #1.
Teleflex is expected to release second-quarter 2019 results on Aug 1. The Zacks Consensus Estimate for adjusted EPS in the to-be-reported quarter is $2.59 and for the top line $636.7 million. The stock has a Zacks Rank of 2.
Radical New Technology Creates $12.3 Trillion Opportunity
Imagine buying Microsoft stock in the early days of personal computers… or Motorola after it released the world’s first cell phone. These technologies changed our lives and created massive profits for investors. Today, we’re on the brink of the next quantum leap in technology. 7 innovative companies are leading this “4th Industrial Revolution” - and early investors stand to earn the biggest profits.
See the 7 breakthrough stocks now>>