Vitamin Shoppe Inc. (NYSE: VSI), a leading specialty retailer and direct marketer of nutritional products, announced preliminary results for its fiscal first quarter ended March 30, 2013. On a reported basis, net income per diluted share for fiscal first quarter 2013 was $0.68. This includes an estimated negative $0.04 per share impact resulting from the Super Supplements acquisition.

Tony Truesdale, CEO of the company, commented, "For 30 consecutive quarters we have consistently delivered positive comparable store sales growth. In the quarter we opened 13 new stores and added 31 Super Supplements stores. We are making strategic investments in 2013 to position the Vitamin Shoppe for continued growth."

Mr. Truesdale further commented, "While we achieved an overall sales growth of 12.5 percent in the quarter, we have experienced variability in our sales performance year-to-date, with April sales a bit slower than anticipated. As a result, we are taking a more cautious view on the year. Our comparable store sales growth performance is expected to be in the low-to-mid-single digits for the full year. Overall, I am pleased with the performance and progress that we made in the quarter and our expectations for longer-term growth remain unchanged."

Fiscal first quarter 2013 results
Net sales in fiscal first quarter 2013 increased 12.5 percent to $279.1 million compared to $248.1 million in the same period of the prior year. Sales growth in the quarter was driven by: 1) a 4.5 percent increase in comparable sales, 2) growth from new stores, 3) the contribution from Super Supplements retail stores of $9.6 million, and, 4) a 16.1 percent increase in ecommerce sales.

The Company opened 13 stores and acquired 31 stores in the quarter. Total store count was 621 as of March 30, 2013, compared with 543 on March 31, 2012. This includes two company-operated stores in Canada but not the franchise store in Panama.

Cost of goods sold, which includes product, warehouse, distribution and occupancy costs, increased $17.7 million, or 11.1 percent, to $177.4 million for the three months ended March 30, 2013, compared with $159.7 million for the three months ended March 31, 2012.

Gross profit increased $13.3 million, or 15.1 percent, to $101.6 million for the fiscal 2013 first quarter, compared with $88.3 million for fiscal first quarter 2012. Gross profit as a percentage of net sales was 36.4 percent for the quarter ended March 30, 2013, up from 35.6 percent in fiscal first quarter 2012. The improvement was primarily due to improvement in warehouse and transportation and leverage on occupancy. The decrease in warehouse and transportation costs as a percentage of net sales is primarily the result of an increase in capitalized inventory costs during the three months ended March 30, 2013 as compared to the three months ended March 31, 2012. The decrease in occupancy as a percentage of net sales reflects the maturation of our newer stores as the increase in store sales more than offsets the increase in our store occupancy costs.

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 $9.1 million, or 15.6 percent, to $67.0 million for the quarter ended March 30, 2013, compared with $57.9 million for the quarter ended March 31, 2012. SG&A as a percentage of net sales were 24.0 percent for first quarter 2013. SG&A includes transaction and integration related expenses for the Super Supplements acquisition of $2.0 million. Adjusted SG&A as a percentage of net sales was 23.3 percent in both of the fiscal first quarters of 2013 and 2012.

Income from operations in fiscal first quarter 2013 was $34.7 million compared to $30.4 million in fiscal first quarter 2012. As a percentage of net sales, income from operations was 12.4 percent for the fiscal 2013 first quarter. Adjusted operating margin, which excludes transaction and integration costs, was 13.1 percent in fiscal 1Q13. This compares with 12.3 percent for fiscal first quarter 2012. By segment, the retail income from operations margin increased in the quarter and reflects continued leverage from sales growth. For the direct business, income from operations reflects the inclusion of the lower performing Super Supplements e-commerce business as well as an increase in advertising expenses.

Net income was $20.8 million for fiscal first quarter 2013, compared with $18.3 million for fiscal first quarter 2012. Adjusted net income in fiscal first quarter 2013 was $22.0 million.

Reported earnings per diluted share (EPS) were $0.68 in fiscal first quarter 2013 compared with $0.61 in first quarter 2012. Fiscal first quarter 2013 diluted EPS, was $0.72 excluding transaction and integration costs.

2013 outlook

For the current year management expects: