Nutritional retailer posts disappointing quarter

Vitamin Shoppe missed profit expectations for its first quarter, amid challenges with its Nutri-Force contact manufacturing division.



Vitamin Shoppe posted net income of $8.0 million for the quarter ended April 1, compared to $14.8 million in the same period last year. Reported fully diluted earnings per share were $0.35 in first quarter 2017, compared to $0.59 in first quarter 2016.



Total net sales in the first quarter were $316.9 million, compared to $336.8 million in the year-ago period. Same-store sales fell 6.3%, reflecting a 5.8% decline in retail store comparable sales and a 9.1% decrease in online lines. The declines were primarily driven by an increasingly promotional environment in the sports nutrition category, the company said.



Vitamin Shoppe has been working to transform its stores to health and wellness destinations, with in-store beverage bars, sampling counters and other elements. It remodeled three locations into the new format in its first quarter.



"Our overall performance in the quarter was disappointing due to lower comparable sales and ongoing challenges at Nutri-Force,” said Colin Watts, CEO, Vitamin Shoppe, which operates approximately 775 stores. "While the start of the year has been challenging, I am encouraged by the progress we have made on our major reinvention and cost reduction initiatives that we began developing and piloting over the last several months. We now plan to accelerate several major components of these initiatives focused on improved customer acquisition, and better store and on-line engagement.”



In addition, Vitamin Shoppe said it will be launching a significant upgrade to its relationship and retention capabilities based on new CRM and auto-delivery subscription services this summer.



“Customer response to our pilots has given us confidence that these new initiatives should have a positive impact on our business trends starting in the back half of this year,” Watts said.