Strong 1Q10 for Vitamin Shoppe

NORTH BERGEN, N.J. Vitamin Shoppe Inc. released its financials for the fiscal first quarter of 2010 (1Q10), posting increases in net sales, operating income and diluted earnings. Net sales were $191.6 million for the period ending March 27, 2010, an 11 percent increase compared to the $172.6 million for 1Q09. The company attributed the rise to an increase in comparable store sales, store performance from the 16 new stores opened during the period, and a 7.8 percent increase in direct sales driven by online purchases.

We had a very strong first quarter, said Rick Markee, chairman and CEO. Comparable store sales for the first quarter of 2010 increased 6.2 percent, making this our 18th consecutive quarter of comparable same-store sales growth. Income from operations increased by 42.3 percent and net income almost doubled.

Gross profit was up by $8 million, a 14 percent increase over 1Q09, to $65 million; gross profit as a percentage of sales stayed in line with the comparable quarter around 33 percent. Ultimately, net income increased to $8.7 million for 1Q10, compared with $4.6 million for 1Q09. Diluted earnings per share increased to $0.31 per share from $0.12 per share for the comparable 2009 quarter. Net income for the current quarter includes a pretax loss on extinguishment of debt of $0.6 million (or approximately $0.01 per share), related to the previously announced redemption of $20 million of Vitamin Shoppes senior notes.

Vitamin Shoppe also reiterated its outlook for 2010, expecting to spend approximately $22 million in total capital expenditures while opening approximately 42 new stores; continued comparable store sales growth in line with industry growth in the mid-single digits; an effective tax rate of approximately 40 percent; diluted weighted average shares outstanding of 27.8 million; inventory growth at a rate less than total sales growth; continued reduction of debt and to fund store growth with excess cash flow; and to improve its operating margin largely reflecting leverage on selling, general and administrative expenses (including corporate and depreciation and amortization expense).