| Stock (Symbol) | Stock Price | |
GNC Holdings (GNC) |
$34 |
|
| Data is as of | Expected to Report | Sector |
August 6, 2014 |
Oct 22 – Oct 27 |
Food & Necessities |
| Sharek’s Take | ||
 GNC (GNC) has problems. In June the company’s CFO unexpectedly quit. Then last week the company missed profit estimates, guided down, and announced its Chairman/CEO/President has quit too. Here’s a list of GNC’s issues: slowing demand, heightened price competition, its Gold Card Member program isn’t working. I’m a Gold Card Member, and yesterday GNC sent me an email with a HUGE 2-for-$20 ad on it. I needed fish oil, so I printed the ad, went down to GNC, and was told this special was only available online (read the fine print). I read the ad again — no mention of online only anywhere…wait, in this tiny print it said online only. If I got the fish oil in the store it would be two for around $40 (buy one for $28, get one half off). Ugh, I walked out without buying anything. Later I thought GNC is pushing its online business and hurting its stores. So I bought the fish oil online and only bought that — no add-on purchases. GNC’s prices are too high, and the gimmick of a rewards program is pushing customers away who just want to come in and buy. The new CEO has said he will fix this, but honestly implementing a new program will take months and then GNC has to get its customers back. I’m selling the stock. |
||
| One-Year Chart | ||
 The +3% earnings gain 2QtrsAgo was because of bad winter weather. Then +5% came last quarter with good weather. Now Estimates have shrunk so much they’ve gone negative. I don’t like this Est. LTG of only 11%, but I do feel the stock will get back to $45. I just don’t know how long that will take. |
||
| Earnings Table | ||
 Profit growth was 5% last qtr, sales were $675 million vs. $676 million a year ago.GNC missed estimates that had been cut two straight qtrs. Annual Profit Estimates continue to decline. 2013 sales were $2.6 billion, 2014 sales are expected to be $2.6 billion and estimates are for $2.8 billion in 2015. Quarterly profit growth is poor. This company probably won’t be a 20% grower again. |
||
| Fair Value | ||
 I’m selling this stock today, but I bet GNC gets back to $45 in 6-to-12 months. I just have another stock I wish to buy and need the funds. Still, I can imagine the company making $3.25 next year and getting a 14 P/E. It won’t be that hard. |
||
| Ten-Year Chart | ||
 Ugh, 0% profit growth expected this year. GNC, you used to be one of my favorite stocks. |
||
| Power Ranking | Bottom Line | |
Growth Portfolio
N/A |
A clean out is needed at GNC, and that’s what the company is getting. The new CEO was once the CEO of Vitamin Shoppe and should be good for the company, I just don’t want to wait around for things to happen. Also, I like to be in 20% growers and with sales growth muted that will be hard to do. GNC will be sold from the Growth Portfolio today. |
|
Aggressive Growth Portfolio
N/A |
||
