GNC Holdings Shares Plunge 16% As Q4 Results Miss View, Weak Outlook

(RTTNews) - Shares of GNC Holdings, Inc. (GNC) plunged 16 percent in extended trading on Thursday after the health and wellness products retailer reported results for the fourth quarter that missed analysts' expectations. The company also provided earnings guidance for the full-year 2014, well below Street view.

However, the company reported a profit for the quarter that edged up from last year, reflecting improved revenues.

"Despite the challenging retail environment, our business performed well, generating solid top and bottom line growth in the quarter," Chairman, President and CEO Joe Fortunato said in a statement.

The Pittsburgh, Pennsylvania-based company reported net income of $47.66 million or $0.50 per share for the fourth quarter, higher than $47.44 million or $0.47 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $60.61 million or $0.63 per share, compared to $49.79 million or $0.50 per share in the year-ago quarter.

On average, 14 analysts polled by Thomson Reuters expected the company to report earnings of $0.64 per share for the quarter. Analysts' estimates typically exclude special items.

Consolidated revenues for the quarter grew 8.6 percent to $613.75 million from $565.02 million in the same quarter last year, but missed thirteen Wall Street analysts' consensus estimate of $631.51 million.

Revenue increased in each of the company's segments, with retail revenues growing 7.8 percent to $443.5 million on same store sales increase of 5.0 percent. Franchise revenues grew 9.4 percent to $103.1 million, and manufacturing/wholesale revenue, excluding intersegment revenue, increased 13.3 percent to $67.1 million from last year.

On January 31, the company's Board of Directors declared a 6.7 percent increase in first-quarter cash dividend to $0.16 per share on its common stock, payable on or about March 28 to stockholders of record at the close of business on March 14, 2014.

For fiscal 2013, the company reported net income of $265.02 million, or $2.75 per share, higher than $240.20 million, or $2.29 per share in the prior year.

Excluding items, adjusted net income for the year was $277.97 million or $2.85 per share, compared to $244.16 million or $2.33 per share in the year ago.

Consolidated revenues for the full year grew 8.2 percent to $2.63 billion from $2.43 billion in the previous year.

Analysts expected the company to report full-year 2013 earnings of $2.87 per share on annual revenues of $2.65 billion.

Looking ahead to fiscal 2014, the company expects consolidated earnings in a range of $3.18 to $3.24 per share, on projected high single-digit increase in consolidated revenues. Street is currently looking for fiscal 2014 earnings of $3.46 per share on annual revenues of $2.90 billion.

"This culminated in a strong year where we delivered a 22.3% increase in adjusted earnings per share and returned more than $350 million to shareholders, all the while making significant investments in the business which allows us to maintain growth momentum and to capitalize on our industry growth, optimize our customer base, and position the Company for new growth opportunities," Fortunato added.

GNC closed Thursday's regular trading session at $52.39, up $0.22 or 0.42% on a volume of 3.69 million shares. However, the stock plunged $8.39 or 16.01% in after-hours trading.