GNC Holdings, whose revenue has recently been under pressure, delivered another mildly disappointing earnings report for the second quarter of 2015.
This quarter, GNC reported consolidated revenue of $678.5 million, an increase of 0.5 per cent when compared 2014’s second quarter figure of $675.2 million. Revenue also increased in the company’s franchise segment by 7.5 per cent, but decreased in the retail and manufacturing segments by 0.3 and 5.6 per cent.
The company also reported a net income of $67.4 million for 2015’s second quarter, a decrease of 3.6 per cent when compared with the net income of $69.9 million for the same time last year. Additionally, diluted earnings per share for this segment were $0.79, an increase of 2.6 per cent as compared to last year’s $0.77 per share.
GNC CEO Michael Archbold notes that manufacturing revenue, which was off 5.6 per cent year-over-year, was impacted by lower sales to major customers such as Rite-Aid, Drugstore.com, PetSmart and Sam’s Club.
Archbold also told analysts that part of the revenue decline in the same-store retail segment—where revenue was off 0.4 per cent year-over-year—had to do with terminating the promotion-heavy strategy that was enacted by previous CEO Joe Fortunato.
Fortunato, who left the company in 2014, focused his regime as CEO on an exceedingly promotional culture that sought to generate major retail traffic; however, this did little to improve profitability. Moving forward into the third quarter, Archbold plans to make GNC’s marketing schemes more targeted in order to “neutralize” their past impact on earnings.
