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GNC drops CEO as sales declines continue 91910GNC drops CEO as sales declines continue 91910
Former PetSmart chairman and CEO will take the helm of GNC as the board seeks new leadership amid ongoing sales declines.
2 Min Read
With disappointing sales and shareholder results continuing, GNC has named an interim CEO while it seeks to replace former CEO Michael G. Archbold.
Robert F. Moran, an independent director of GNC and former chairman and chief executive officer of PetSmart, will take on the interim role, GNC announced Thursday morning.
"The board believes it is the right time to undertake this change to drive effective execution of our plans," said Michael F. Hines, GNC's chairman, via press release. "During Bob's four decades as a successful retail executive he demonstrated a proven ability to lead organizations in highly competitive environments and deliver profitable growth and shareholder value. His insights and perspective have been valuable during his tenure as an Independent Director, and we are grateful for his willingness to step into the interim CEO role at this time."
Archbold served for two years.
Moran opened the second-quarter earnings call emphasizing that GNC’s previously announced strategic review will continue. Meanwhile, the company chose to suspend 2016 guidance while Moran reviews company performance.
The GNC board, Moran said, determined it needed to “move with urgency” as it reported a 3.7 percent decline in company-owned same-store sales. Same-store sales at franchise locations fell 6.6 percent.
Second-quarter earnings highlights include:
Consolidated revenue of $673.2 million, a decrease of 2.4 percent as compared with consolidated revenue of $689.6 million for the second quarter of 2015.
Revenue in the U.S. and Canada segment decreased by 2 percent; revenue in the international segment decreased 2.5 percent.
Revenue in the manufacturing/wholesale segment, excluding intersegment sales increased 5.3 percent.
Net income of $64.0 million compared with net income of $67.4 million in the second quarter of 2015.
GNC’s challenges have grown as healthy lifestyle products continue to expand in mass and drug channels and beyond.
“We have a healthy disrespect for the status quo,” Moran said.
The key, he said, is more customers, more transactions and more footsteps in the store.
Brand equity, customer experience, innovation drive remain important initiatives, Moran said. Meanwhile, store experience will continue to be a focus as GNC seeks to enhance that with a goal of becoming a trusted customer adviser.
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