Vitamin Shoppe (VSI) reported earnings on Wed 9 Aug 2017 (b/o)

** charts after earnings ** 

  

Vitamin Shoppe misses by $0.16, misses on revs; resets FY17 outlook

• Reports Q2 (Jun) earnings of $0.23 per share, excluding non-recurring items, $0.16 worse thanthe Capital IQ Consensus of $0.39; revenues fell 8.4% year/year to $304.84 mln vs the $314.74 mln Capital IQ Consensus.
• Total comparable sales were down 8.3% in the quarter reflecting a 7.6% decline in retail store comparable sales and a 20.2% decrease in vitaminshoppe.com comparable sales.The decrease in comparable sales was partially impacted by a sales promotion last year that was not repeated, as well as ongoing challenges with the sports customer. The Company opened three stores in the quarter, and transformed seven into the new brand defining store [BDS] format. Manufacturing sales to Vitamin Shoppe increased 63.6%, while third party sales decreased 27.8% from the same period of the prior year as the Company continues to right-size this business.
• Given the unprecedented level of volatility in the market and the potential increase in variability of the Company's results due to the number of initiatives being launched in the back half of the year, the Company has reset its 2017 outlook and is modifying its approach to guidance. The Company is providing guidance around the key levers that drive the business instead of providing specific EPS guidance.
  • The Company expects full year comparable sales decline rate of negative mid-single digits [The company previously guided for total comparable sales growth rate of negative low to mid single digit]
  • Reported full year gross margin rate of 30.2% to 30.7%. This includes charges associated with the Nutri-Force restructuring and North Bergen closure this year. Excluding these charges, full year gross margins of 31.3% to 31.8%.
• The Company plans to close the North Bergen, New Jersey distribution center prior to, or by, the August 31, 2018 lease expiration. Distribution operations will be transitioned to the Company's other distribution centers and will be substantially completed by the end of fiscal year 2017. Costs related to this closure such as severance, inventory-related costs and other charges are estimated to be approximately $4.0 million. As a result of this closure the Company anticipates annualized savings between $4.0 million to $5.0 million upon lease expiration.