Vitamin Shoppe, Inc. Announces Second Quarter 2013 Results

NORTH BERGEN, N.J., Aug. 6, 2013 /PRNewswire/ -- Vitamin Shoppe, Inc. (NYSE: VSI), a leading multi-channel specialty retailer of nutritional products, today announced preliminary results for its fiscal second quarter ended June 29, 2013.  Total net sales in the quarter increased 14.1% to $279.5 million compared to $245.0 million in the same period of the prior year.  Net income per diluted share for fiscal second quarter 2013 was $0.60 compared to $0.55 per share in the same quarter of the prior year.  

Tony Truesdale, Chief Executive Officer of the Company commented, "On a comparable store sales basis, the first two quarters were more challenging and volatile than they had historically been as we lapped last year's strong performance in sports nutrition, accelerated weight management sales and above-average retail inflation.  Nevertheless, we delivered positive comparable store sales in the quarter which represented the 31^st consecutive quarter of positive comparable store sales."

Mr. Truesdale further commented, "2013 is a year of investment for the Vitamin Shoppe as we position the company for long-term sustainable growth.  We have successfully integrated the back office operations of Super Supplements and towards quarter's end we began inbound inventory shipment to our new Virginia distribution center.  We remain focused on our key growth initiatives and will continue to invest in all shopping channels to encourage customers to experience the Vitamin Shoppe whenever or wherever they want."

Fiscal Second Quarter 2013 Results

Total net sales in fiscal second quarter 2013 increased 14.1% to $279.5 million compared to $245.0 million in the same period of the prior year.  Sales growth in the quarter was driven by: 1) a 2.3% increase in comparable sales, which was on top of an 8.3% comparable sales increase in the second quarter of 2012, 2) the contribution from Super Supplements retail stores of $18.0 million, 3) growth from new stores, and, 4) an 18.5% increase in ecommerce sales, including a 5.5% contribution from Super Supplements. 

The Company opened 10 stores in the quarter and 23 year-to-date.  The majority of the second quarter store openings occurred late in the quarter.  Total store count was 630 as of June 29, 2013, compared with 551 on June 30, 2012.  This includes two company-operated stores in Canada.

Cost of goods sold, which includes product, warehouse, distribution and occupancy costs, increased $23.0 million, or 14.4%, to $182.2 million for the three months ended June 29, 2013, compared with $159.2 million for the three months ended June 30, 2012.  

Gross profit increased $11.5 million, or 13.4%, to $97.3 million for the fiscal 2013 second quarter, compared with $85.8 million for fiscal second quarter 2012.  Gross profit as a percentage of net sales was 34.8% for the quarter ended June 29, 2013, compared to 35.0% in fiscal second quarter 2012.  The decrease was attributable to lower gross margins at Super Supplements.

Selling, general and administrative expenses (SG&A), including operating payroll and related benefits, advertising and promotion expense, depreciation and amortization, and other SG&A, increased $8.6 million, or 14.9%, to $66.7 million for the quarter ended June 29, 2013, compared with $58.1 million for the quarter ended June 30, 2012.  SG&A includes integration related expenses for the Super Supplements acquisition of approximately $0.9 million offset by insurance recoveries of $0.9 million related to Super Storm Sandy.  SG&A as a percentage of net sales were 23.9% for second quarter 2013 compared with 23.7% in second quarter 2012.  This increase was attributable to the inclusion of Super Supplements.

Income from operations in fiscal second quarter 2013 was $30.6 million, an increase of 10.4% from the same period in the prior year.  As a percentage of net sales, income from operations was 10.9% for the fiscal 2013 second quarter compared with 11.3% for fiscal second quarter 2012.  By segment, the retail income from operations margin decreased 40 basis points in the quarter and reflects the inclusion of Super Supplements.  For the direct business, income from operations reflects the inclusion of the lower margin Super Supplements e-commerce business as well as an increase in promotional activity.

Net income was $18.3 million for fiscal second quarter 2013, compared with $16.6 million for fiscal second quarter 2012.  Reported earnings per diluted share (EPS) were $0.60 in fiscal second quarter 2013 compared with $0.55 in second quarter 2012.  

Balance Sheet and Cash Flow
Cash and equivalents at June 29, 2013 were $54.8 million.  Capital expenditures were $12.0 million in the quarter and $23.8 million year-to-date.  Capital expenditures were used primarily for the new distribution center, build-out of new stores, improvements to existing stores, as well as the integration of Super Supplements. 

2013 Outlook
For the current year management expects:

• To open approximately 50 new stores
• Low to mid single digit comparable store sales growth for the year
• Capital expenditures of approximately $45 - $50 million, which includes capital for the new distribution center
• Depreciation & amortization of approximately $28 million which includes the additional depreciation from the Super Supplements acquisition
• Super Supplements acquisition is expected to be slightly dilutive to earnings per share, which includes transaction and integration costs
• Fully diluted shares outstanding of 30.7 million

Webcast
Management will host a conference call to discuss its second quarter 2013 results at 8:30 a.m. Eastern Time (ET) today.  Interested investors and other parties may listen to the simultaneous webcast of the conference call by logging onto the Investor Relations section of the Company's website at www.vitaminshoppe.com. The online replay will be available immediately following the call. A telephonic replay will also be available beginning at 11:30 a.m. ET and can be accessed by dialing 1-877-870-5176 or for international callers, 1-858-384-5517. The passcode for the replay is 5595323. The replay will be available until 11:59 p.m. ET on August 13, 2013.

About the Vitamin Shoppe, Inc. (NYSE: VSI)
Vitamin Shoppe is a leading multi-channel specialty retailer of nutritional products based in North Bergen, New Jersey.  In its stores and on its website, the company carries one of the most comprehensive retail assortments in the industry, including vitamins, minerals, specialty supplements, herbs, sports nutrition, homeopathic remedies, green living products, and beauty aids.  In addition to offering 600 national brand products, the Vitamin Shoppe also exclusively carries products under The Vitamin Shoppe, BodyTech, True Athlete and MyTrition brands.  The Vitamin Shoppe conducts business through more than 630 company-operated retail stores under The Vitamin Shoppe, Super Supplements and Vitapath retail banners, and through its website, www.VitaminShoppe.com. Follow The Vitamin Shoppe on Facebook at http://www.facebook.com/THEVITAMINSHOPPE and on Twitter at http://twitter.com/VitaminShoppe.

Forward Looking Statements
Certain statements in this press release are "forward-looking statements." Such forward-looking statements reflect the Company's current expectations or beliefs concerning future events and actual results of operations may differ materially from historical results or current expectations. Any such forward-looking statements are subject to various risks and uncertainties, including, the risk that the operations of Super Supplements will not be integrated successfully, the strength of the economy, changes in the overall level of consumer spending, the performance of the Company's products within the prevailing retail environment, trade restrictions, availability of suitable store locations at appropriate terms and other factors which are further described in the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2012 and in all filings with the Securities and Exchange Commission made by the Company subsequent to the filing of the Form 10-K.  The Company does not undertake to publicly update or revise its forward-looking statements, whether as a result of new information, future events or otherwise, unless required to do so by law.

SOURCE Vitamin Shoppe, Inc.