GNC Holdings, Inc. (NYSE:GNC) surged 27.62% midday Tuesday on mixed results from its fiscal 2017 first-quarter earnings.
The Pittsburgh-based company reported a 3.9% same-store sales drop and a 3.6% decline in revenue year-over-year. The company saw revenue figures of $644.8 million, compared to $668.9 million a year ago.
Though Q1 sales dropped from a year ago, it did beat the Zack Consensus Estimate of $631 million. The nutrition retailer posted earnings of 37 cents per share, also topping our consensus estimates of 33 cents earnings per share.
GNC attributed the negative same-store sales to consumers’ trend of a healthier diet. Sales in the protein, vitamins, food/drink and weight management categories were lower, offset by the health and beauty and performance supplement categories.
Online sales fell 7.2%, and GNC ended the quarter with a total of 8,983 stores globally, compared to 9,064 in 2016.
However, it seems like investors see the bright side of the health and wellness retailer’s first quarter earnings.
“We’re encouraged by positive trends in transactions, and by the early performance of our new loyalty programs, which are demonstrating their power to increase consumer frequency and spending,” said GNC CEO Bob Moran. The company noted that transaction rate went up by 9.3%.
Furthermore, GNC now has five million members in their rewards loyalty program as of the end of March 2017. The company will begin using customer relationship information to “better reach and more cost effectively speak to its customers.”
Despite the significant gain, GNC’s stock is still down 15% year-to-date. The company is trading at $9.24 per share in midday Tuesday.
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