The Vitamin Shoppe reported sluggish third-quarter earnings on Nov. 4 as the supplement retailer continues its “reinvention.”
"I am pleased with the progress we are making in view of ongoing industry softness, and that we delivered year-over-year improvement in earnings per share,” Vitamin Shoppe Chief Executive Officer Colin Watts said in a prepared statement. “While we still faced some challenges for top-line growth in the quarter, our comparable sales improved when compared with the prior quarter. Additionally, we are encouraged by the ongoing year-over-year increase in product gross margins."
Third-quarter earnings highlights for the New Jersey-based chain include:
- Revenue grew 1.6 percent to $313.9 million, primarily driven by non-comp stores.
- Comparable sales growth came in at 0.1 percent.
- Gross profit increased $7.4 million, or 7.6 percent, to $104.7 million, compared with $97.3 million for third quarter 2014.
- Opened 15 stores.
- Good top-line growth in digestive health products, on-the-go nutrition and aromatherapy was offset by slower than historical growth rates of sports nutrition and challenges in the weight management category and Nutri-Force contract manufacturing business.
Watts said details of The Vitamin Shoppe reinvention process that the company embarked on this year will be discussed during the fourth-quarter call in February. Meanwhile, expect more category expansions like the Protein Pantry set announced last month.
“We think there’s more opportunity to get to more innovation beyond just the straight up pills and powders area,” Watts said. “We look forward to doing more of that as we move into 2016.”
The strategy addresses a consumer shift toward integrating wellness into one’s lifestyle. Watts said the company’s research shows today’s shoppers seek places to trust and work with on their everyday health journey. “We believe we are in a great position to step into that,” he said.
Private label, category expansion (particularly in functional and fortified foods) and third-party partnerships are key.
But that doesn’t leave supplements behind. The Vitamin Shoppe has completed an in-depth customer study of 4,000 consumers. A key takeaway: Research shows strong purchase intent for the supplement category with 90 percent reporting consumption has remained stable or increased over the past three years. More than 30 percent are taking more supplements.