Vitamin Shoppe Inc., a leading multichannel specialty retailer of nutritional products, announced preliminary results for the fourth quarter and full year ended Dec. 28, 2013. Total net sales in the quarter increased 17.2 percent to $256.4 million compared to $218.9 million in the same period of the prior year. Reported earnings per share in fourth quarter 2013 were $0.37, compared with $0.32 in fourth quarter 2012.

Tony Truesdale, chief executive officer, commented, "The fourth quarter was another solid quarter for us. Our customers are responding favorably to changes and updates we consistently undertake to improve their online shopping experience with e-commerce sales up 25 percent in the quarter. I am also very proud that we delivered our 20th consecutive year of positive comparable retail store sales growth. We undertook two major growth initiatives during 2013; the acquisition of Super Supplements and the opening of a new distribution center in Ashland, Va."

Mr. Truesdale further commented, "We participate in an attractive growth industry. We remain focused on our long-term top and bottom line results and continue to make investments to support our growth. Our business generates strong cash flow, and our balance sheet is solid providing significant financial resources."

Fourth quarter 2013 results 
Sales growth in the quarter was driven by: 1) a 4.6 percent increase in comparable retail store sales, 2) the contribution from Super Supplements retail stores of $16.8 million, 3) growth from non-comp stores, and 4) a 25.5 percent increase in e-commerce sales, including an approximate 5.5 percent contribution from Super Supplements online sales. Total comparable sales were 6.2 percent when including e-commerce comp sales.

The Company opened 19 stores in the quarter, 52 for the full year and acquired 31 Super Supplements stores. The majority of the fourth quarter store openings occurred later in the quarter. Total store count was 659 as of December 28, 2013, compared with 579 on Dec. 29, 2012. 

Cost of goods sold, which includes product, warehouse, distribution and store occupancy costs, increased $28.2 million, or 19.8 percent, to $170.7 million for the three months ended Dec. 28, 2013, compared with $142.5 million for the three months ended Dec. 29, 2012.

Gross profit increased $9.3 million, or 12.2 percent, to $85.7 million for 2013 fourth quarter, compared with $76.4 million for fourth quarter 2012. Gross profit as a percentage of net sales was 33.4 percent for the quarter ended Dec. 28, 2013, compared to 34.9 percent in fourth quarter 2012. The decrease was primarily attributable to the opening of the new distribution center, shifts in product category sales mix and higher penetration of e-commerce sales.

Selling, general and administrative expenses (SG&A), including operating payroll and related benefits, advertising and promotion expense, depreciation and amortization, and other SG&A, increased $6.8 million, or 11.4 percent, to $66.8 million for the quarter ended Dec. 28, 2013, compared with $59.9 million for the quarter ended Dec. 29, 2012. SG&A includes integration related expenses for Super Supplements of approximately $0.5 million. SG&A as a percentage of net sales was 26.0 percent for fourth quarter 2013 compared with 27.4 percent in fourth quarter 2012. The reduction reflects lower incentive compensation expense.

Income from operations in fourth quarter 2013 was $18.9 million, an increase of 14.9 percent from the same period in the prior year. As a percentage of net sales, income from operations was 7.4 percent for fourth quarter 2013 compared with 7.5 percent for fourth quarter 2012. 

Net income was $11.2 million for fourth quarter 2013, 15.9 percent higher than fourth quarter 2012. Reported earnings per diluted share (EPS) were $0.37 in fourth quarter 2013 compared with $0.32 in fourth quarter 2012. Fourth quarter 2013 includes $0.01 per share of integration costs related to the Super Supplements acquisition. Fourth quarter 2012 includes an estimated negative $0.08 per share impact resulting from Superstorm Sandy, the Super Supplements acquisition and Canadian start-up costs.

Balance Sheet and Cash Flow Cash and equivalents at Dec. 28, 2013 were $74.0 million and the company has no debt. 

Capital expenditures were $10.4 million in the quarter and $42.8 million for the full year. Funds were expended primarily for the new distribution center, build-out of new stores and improvements to existing stores.

Fiscal 2013 financial and operating highlights: