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.”
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