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Sales challenges resulted in yet another disappointing quarter as The Vitamin Shoppe reported its third-quarter earnings. The changing sports customer is among the supplement retailer and manufacturer's trials.
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Sales declines continue as The Vitamin Shoppe struggles to serve the price sensitive and changing sports nutrition customer.
Net sales in the third quarter 2017 fell 8.5 percent to $288.2 million, compared with $314.9 million in the same quarter last year.
CEO Colin Watts attributes 80 percent of the decline to today's sports nutrition customer who is finding promotions at competing retailers.
Other third-quarter results include:
Retail comps declined 7 percent while vitaminshoppe.com comparable sales were down 5 percent.
Manufacturing sales to The Vitamin Shoppe increased 43.1 percent, while third-party sales decreased 58.2 percent from the same period of the prior year.
Gross profit of $86.1 million was 15.7 percent lower than $102.1 million in third quarter 2016.
Reported gross profit as a percentage of net sales was 29.9 percent, compared with 32.4 percent in the same period 2016.
Reported basic and fully diluted loss per share was $3.72, compared with fully diluted earnings per share of 48 cents in third quarter 2016.
The company opened three stores in the quarter.
“The competitive environment remains elevated and challenging,” Watts said via press release.
A bright spot has been the launch of the SPARK Auto Delivery program. Vitamin Shoppe captured 200,000 subscriptions in the program’s first six weeks. The program offers a 10 percent discount, flexible delivery options and a quarterly sample box, among other services. The early success is a “clear sign we can compete on an omni basis,” Watts said.
Recovery efforts also include a focus on customer acquisition and improving customer price perceptions. Watts plans to outline the supplement retailer and manufacturer’s omnichannel and strategic plan in more details during the company’s first quarter 2018 earnings call.
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