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GNC says bad press took a bite out of Q1 results

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GNC’s profit slid in the first quarter, but although the company said that severe weather during January and February affected its financial results, it also pointed to an “unusually significant amount” of negative media as a driving factor for the dip.

“January and February were affected by severe weather across large parts of the country, resulting in a delayed start to the workout season,” said president and CEO Joe Fortunato. “Recent trends have also been affected by an unusually significant amount of negative media, and year-over-year sales hurdles in the third-party diet and pre-workout categories. Based on our current information it looks like these recent trends will persist for the next few quarters.”

Fortunato did not cite specifics regarding the negative media publicity, but news outlets that include NPR and BBC have published in recent months articles about dietary supplements getting recalled or questioning their efficacy.

GNC’s net income for the quarter dipped to $69.9 million from $72.6 million in the year-ago period.

Retail revenue grew 3.1% to $509 million, compared to $493.5 million for first quarter 2013, driven primarily by strength from the e-commerce sector. Consolidated revenue edged up 1.9% to $677.3 million. Same-store sales decreased 0.7%.
 

 

 

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