The Vitamin Shoppe Inc. on Wednesday reported first-quarter sales decreased 4.3% in 2019 to $283.3 million, but gross profit increased 1.8% to $94.8 million.
The company also announced that it will close 60 to 80 underperforming stores in the next three years. Already, it is renegotiating leases and closing some stores; five closed this quarter, said interim Chief Financial Officer Chuck Knight.
“We are making progress against our turnaround plan and remain on track to deliver our key initiatives for the remainder of the year,” CEO Sharon Leite said.
“We continue to be focused on growing the top line profitably and are still finding the balance of margin expansion while driving customer traffic,” she continued. “However, we will not chase sales at the expense of merchandise margin dollars. We will be thoughtful and diligent as we restore The Vitamin Shoppe’s top line sales numbers.”
The company had 769 stores at the end of the first quarter, which ended March 31.
The Vitamin Shoppe is expanding into nutritional services with a “virtual consultation” that will launch in June. Leite did not provide additional details, and she did not take questions after the call.
In February, The Vitamin Shoppe reported a year-end net income of $13.5 million compared with a net loss of $235.5 million the prior year. However, net sales were down 3% compared with 2017.
Results for the first quarter, which ended March 31, are similarly mixed:
- Comparable sales were down 3.5% from the first quarter of 2018.
- Adjusted gross profit was $94.9 million this year compared with $94.8 million in 2018, a 1.1% improvement.
- Gross profit margin increased to 33.5% from 31.5% a year ago. Adjusted gross profit margin was 33.5% compared with 32%.
- Net income was $3.5 million compared to a loss of $3.86 million in Q1 2018.
- Operating income was $6.3 million, up from $3.8 million a year ago, a 65.8% increase. Adjusted operating income was $8.3 million this year, compared with $6.2 million, a 33.9% increase.
“We remain confident that we’re doing the right things to improve the business and position The Vitamin Shoppe for long-term success,” Knight said. Knight was appointed to the interim position effective April 5 after CFO Bill Wafford left the company. Knight previously was The Vitamin Shoppe’s chief accounting officer.