1Q Growth for GNC

PITTSBURGHGrowth from top to bottom characterized the 2010 first quarter (1Q10) report from General Nutrition Centers, Inc. (GNC), which saw 1Q earnings increase 33 percent over a year ago. In fact, the net profit margin widened to 5.6 percent from 4/4 percent in 1Q last year. The $26.0 million in 1Q10 net income was driven by a 5.7-percent rise in revenues, which hit $465.0 million, with growth of 5.1 percent in the retail segment and 12.6 percent in the franchise segment. There was, however, a slight decline in 1Q manufacturing revenues, which fell 0.3 percent year-over-year. Furthering the gains, 1Q10 same store sales improved 3.1 percent, marking the 19^th consecutive quarter of positive same store sales.

During 1Q10, GNC opened a net of nine new domestic company-owned stores, three new Company-owned stores in Canada, 31 new international franchise locations, and 54 new franchise store-within-a-store Rite Aid locations; it closed eight domestic franchise locations. Also in the quarter, the company partnered with The Gatorade Company to launch G Series Pro, a new sports drink variant of Gatorades recently launched G Series. Until now it has only been available in professional sports locker rooms and specialized training facilities, according to GNC, which reported the line will be distributed initially through an exclusive co-marketing and co-distribution collaboration with GNC and its network of more than 3,500 company-owned and franchised stores across the country.

Our first quarter results represent a good start to 2010, as we continue to grow revenue, profit, Adjusted EBITDA margin, and cash flow, said Joe Fortunato, CEO of GNC, who added the company continues to make progress on its major strategic initiatives. The recently announced collaboration with Gatorade is a good example of our exciting new brand extension efforts.