GNC Holdings Announces the Implementation of New Plans



Price movement

GNC Holdings (GNC) has a market cap of $851.9 million. It fell 3.7% to close at $11.12 per share on December 28, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -13.9%, -22.3%, and -62.7%, respectively, on the same day.

GNC is trading 15.9% below its 20-day moving average, 24.5% below its 50-day moving average, and 49.2% below its 200-day moving average.

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Related ETF and peers

The iShares Morningstar Small Value ETF (JKL) invests 0.28% of its holdings in GNC Holdings. The YTD price movement of JKL was 28.0% on December 28.

The market caps of GNC Holdings’s competitors are as follows:

  • Walgreens Boots Alliance (WBA) — $90.2 billion
  • Rite Aid (RAD) — $8.7 billion

Latest news on GNC

On December 28, 2016, TheStreet reported, “The latest struggling outfit to employ such a strategy is vitamin-seller GNC Holdings (GNC), which will close its 4,440 U.S. stores on Wednesday to overhaul its pricing system. When the stores open their doors Thursday, labels for GNC’s protein powders, herbal remedies and nutritional supplements will feature a single price.

“About 50% of the company’s products will be offered at lower prices than before, while a quarter of the prices will be higher. Gone will be the company’s generally unpopular Gold Card rewards program, replaced by a new simplified one called My GNC Rewards. The company will also launch a new mobile app.”

Performance of GNC Holdings in 3Q16

GNC Holdings reported 3Q16 revenues of $628.0 million, a fall of 8.1% compared to revenues of $683.4 million in 3Q15. The company’s gross profit margin and operating margin narrowed 240 basis points and 170 basis points, respectively, in 3Q16 compared to 3Q15.

Its net income and EPS (earnings per share) fell to $32.4 million and $0.47, respectively, in 3Q16 compared to $45.8 million and $0.54, respectively, in 3Q15. It reported adjusted EPS of $0.59 in 3Q16, a fall of 21.3% compared to 3Q15.

GNC’s cash and cash equivalents fell 34.2%, and its inventory rose by 11.9% between 3Q16 compared to 4Q15.

In the next part, we’ll discuss Harley-Davidson (HOG).


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