Vitamin Shoppe Q2 Down Again, But Digital Grows 36.9%

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Secaucus, NJ — Vitamin Shoppe, Inc. announced preliminary results for the three months ended June 30, 2018.  Total net sales in the second quarter were $293.1 million compared to $296.4 million in the same period of the prior year.

Reported fully diluted earnings per share (EPS) were $0.30 in second quarter 2018, compared to  a loss per share  of $6.73 in second quarter 2017.  Reported EPS from continuing operations in second quarter 2018 was $0.22, compared to a loss per share from continuing operations of $6.30 in the same period of the prior year.

Results in second quarter 2018 include a $3.7 million pre-tax gain on the extinguishment of debt, a $3.6 million pre-tax charge related to assortment optimization as well as net pre-tax expenses of approximately $2.9 million associated with management realignment, other professional fees and the closure of the New Jersey distribution center.

Second quarter 2017 results included goodwill and store impairment expenses totaling $168.1 million.  Excluding these adjustments, EPS from continuing operations was $0.31 in second quarter 2018 flat with second quarter 2017.

Commenting on the Company’s financial performance, Bill Wafford, Chief Financial Officer said, “The Company delivered improved financial results primarily attributable to growth from digital commerce and better gross margins.  Additionally, the excess cash flow generated in the quarter, coupled with a draw down on our line of credit, enabled us to opportunistically repurchase $30 million face value of our convertible debt due December 2020 at a discount to par value.  To date, we have repurchased $75 million face value of our convertible debt, further improving our financial position.”

Alex Smith, Chairman of the Vitamin Shoppe stated, “Our focus on retail fundamentals is starting to deliver improved performance.  In the second quarter we saw improvement across all key metrics including: comp sales, customer acquisition and product margin.  Additionally, as we announced on July 23, Sharon Leite will be our new CEO.  I am delighted to have a leader of Sharon’s caliber to spearhead the ongoing turnaround and future growth, building on the recent good work of the organization.”

Second Quarter 2018 Results

Total sales of $293.1 million in the quarter were 1.1% lower than the same period of the prior year.  Total comparable sales were down 1.1% in the quarter.  As the Company continues to advance its omni-channel initiative, digital comparable net sales, which includes vs.com and Auto Delivery, increased 36.9% in the quarter.  The Company opened one store in the quarter and closed two.

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