GNC readies for store closings
GNC plans to shutter stores across North America this year.
As part of GNC’s ongoing plan to streamline its store portfolio, the retailer will close approximately 200 stores in the United States and Canada in 2018. It also plans to limit its new store openings for the year.
“Efforts toward favorable lease renegotiations or relocation opportunities are ongoing, and may impact the amount of stores closings,” according to the company.
The company ended the first quarter with 8,905 store locations worldwide.
For the quarter, net income was $6.2 million, compared with $24.7 million in the prior year. Earnings per share was $0.07, compared with $0.36 in a year ago. The company also recorded a $16.7 million loss on debt refinancing.
Revenue was $607.5 million, compared with $654.9 million in the first quarter of 2017. The drop was primarily due to the sale of Lucky Vitamin in September, which resulted in a $22.7 million reduction to revenue. Ending the company’s U.S.-based Gold Card Member Pricing loyalty program in December 2016 also resulted in a $23.0 million decrease in revenue.
Same-store sales increased 0.5% in domestic company-owned stores (including GNC.com). In domestic franchise locations, same-store sales decreased 1.9%. Despite overall sales declines, the company credited its brand mix and private-label weight loss product for attracting new customers and driving larger baskets.
Loyalty membership increased 12.3% to 12.8 million members, compared with December 31, 2017. Included in its loyalty membership are 935,000 members enrolled in Pro Access, a 23.6% increase, compared with December 31, 2017.
“During the first quarter of 2018, we continued to see the business improve, and were pleased with the progress of our strategic growth initiatives,” said Ken Martindale, CEO. “Notably, we delivered meaningful gross margin growth, driven primarily by increased penetration of our private-label brands. We continue to work to leverage our strength in innovation, expand our international presence and deliver a consistent, compelling experience at every customer touchpoint.”
Starbucks brews up a strong Q2
Another strong performance by Starbucks’ China region helped bolster revenue and beat analyst expectations for the second quarter.
For the quarter ended April 1, Starbucks’ revenue jumped 14% to $6.03 billion, beating analyst estimates of $5.9 billion. Earnings per share were $0.53, up 18% over the prior year.
These increase was fueled by the consolidation of the company’s recently acquired East China business, as well as the closure of its Teavana brand, the Tazo tea brand, and the conversion of certain international retail operations from company-owned to licensed models.
Global comparable-store sales increased 2%, beating 1.8% growth expected by analysts. This jump was driven by a 3% increase in average ticket. Americas and U.S. comp-store sales increased 2%, while China’s comp-store sales increased 4%.
The Starbucks Rewards loyalty program added 1.6 million active members in the U.S., up 12% over the prior year. Loyalty member spend increased to 39% of U.S. company-operated sales. Mobile Order and Pay represented 12% of U.S. company-operated transactions.
“The second quarter of fiscal 2018 represented another quarter of record financial results, highlighted by accelerating momentum across our Americas business — particularly in the U.S., continued strong performance in China, and our strongest comp growth in Japan in five quarters,” said Kevin Johnson, president and CEO.
Amazon’s profit and sales skyrocket in Q1
Amazon reported huge sales and profit surges in the first quarter, increases that were fueled by its fast-growing cloud services business (AWS) and Prime loyalty members.
For the quarter ended March 31, net income was $1.6 billion, or $3.27 per share, compared with net income of $724 million, or $1.48 per share, in first quarter 2017. This beat analysts’ expectations of $1.26 per share.
Net sales increased 43% to $51.0 billion, compared with $35.7 billion a year ago.
Operating income increased 92% to $1.9 billion in the first quarter, compared with $1.0 billion in last year’s first quarter.
Prime memberships contributed to Amazon’s jump in revenue. Members — which are more than 100 million globally — spend above average on Amazon. Sales from Prime fees and other subscriptions grew 60% to $3.1 billion.
AWS, which handles data and computing for large enterprises in the cloud, also increased its profit for the quarter. The division reported $5.44 billion in sales, a 49% increase. This beat analyst estimates of $5.25 billion.
“AWS had the unusual advantage of a seven-year head start before facing like-minded competition, and the team has never slowed down,” said Jeff Bezos, Amazon founder and CEO.
Looking ahead to the second quarter, net sales are expected to be between $51.0 billion and $54.0 billion. This growth will range between 34% and 42% over the second quarter of 2017. This guidance is based on the fact that no additional business acquisitions, investments, restructuring, or legal settlements will take place.