GNC beats Q2 earnings amidst store optimizations

GNC Holdings, Inc. (NYSE: GNC) on Monday reported second-quarter adjusted earnings of 13 cents per share, surpassing the Street consensus by a cent, as operating income margin increased 150 bps to 10.3%.

Revenue for the quarter, meanwhile, fell to $534.0 million, from $617.9 million a year ago, hurt by the transfer of the Nutra manufacturing and China businesses to the newly formed joint ventures, negative same-store sales and the closure of company-owned stores under our store portfolio optimization strategy. The top-line missed the average analysts’ estimate of $553.1 million.   

Domestic same-store sales decreased 4.6%.

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However, the top-line beat sent the stock up 5% during pre-market trading on Monday. The shares have declined 25% since the beginning of this year.

GNC Ken Martindale said, “During the second quarter of 2019, although we experienced some softness in our sales, we delivered meaningful growth in our operating income margins consistent with our long-term strategy. The quarter represented solid progress towards our store optimization and cost savings initiatives.”

The health and wellness brand said revenues in the US and Canada segment decreased 8% to $476.1 million, while that in the International segment fell 18.9%, to $39.4 million.

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