GNC’s profits fall in Q2

Despite online and in-store transaction growth, GNC’s income and revenue declined in the second quarter.



Net income for the quarter ended June 30, totaled $15.7 million compared with $64.0 million in the prior year quarter. Excluding non-cash long-lived asset impairment charges in the current quarter and gains on refranchising in the same quarter last year, adjusted earnings was $0.41.This just beat analyst expectations of $0.40, according to Zacks Consensus Estimate. However, this is a drop from $0.79 for the same period in 2016.



Revenue hit $641.0 million, compared with consolidated revenue of $673.2 million for the second quarter of 2016. Same-store sales decreased 0.9% in domestic company-owned stores (including GNC.com sales) for the quarter. In domestic franchise locations, same-store sales decreased 1.1%.



Transaction growth was up 12.3%, which contributed to an improvement in same-store sales, compared to the first quarter. At the end of the quarter, the company had 7.3 million consumers enrolled in the My GNC Rewards Program. There are approximately 237,000 Pro Access subscription-based premium rewards members.



"We made good progress in the second quarter, and our investments in pricing, loyalty and improving the customer experience continued to deliver positive results," said GNC’s interim CEO, Bob Moran.



"For the second quarter in a row, we saw meaningful transaction growth, improvement in our dot.com business and increased enrollment in our loyalty programs,” he added. “We believe this business is headed in the right direction, and we remain focused on execution and sales growth.”