Commenting on the results, Tony Truesdale, Chief Executive Officer of the Company stated, “Again we are pleased with the consistent results we achieved this quarter.  We delivered our 25th consecutive quarter of positive comparable sales growth.  Revenue was robust, merchandise margins strong, operating margins expanded and earnings per share grew at a healthy double-digit pace.  Our in-store experience and our website are all resonating with our customers.”  Added, Mr. Truesdale, “I want to thank all the Vitamin Shoppe team members for their contributions.  It is due to all their hard work that we were able to successfully execute our strategic initiatives and deliver another quarter and year of outstanding financial results.”

Mr. Truesdale further commented, “Our growth plan is on track, and we are successfully executing on our business model.  We continue to invest in the marketing initiatives which are driving customers to our stores and to our website.  I am pleased that our results exceeded our expectations as we continue to strengthen the foundation that will enable us to deliver long-term consistent growth and shareholder value.”

Fiscal Fourth Quarter 2011 Results

Net sales increased $34.6 million, or 19.2%, to $214.9 million for the three months ended December 31, 2011, compared with $180.3 million for the three months ended December 25, 2010.  After adjusting for the extra week in 2011, net sales increased $19.0 million, or 10.6%.  This increase was the result of the growth in comparable store sales predominantly driven by traffic, growth from new stores and a 9.3% increase in direct sales as the result of a 13.2% increase in e-commerce sales.

Overall store sales for the fiscal 2011 fourth quarter, excluding the extra week, grew as a result of an increase in non-comparable store sales of $6.9 million and an increase in comparable store sales of $10.2 million, or 6.5%.  The Company opened 14 stores in the quarter.  Total store count was 528 as of December 31, 2011, compared with 484 on December 25, 2010.

Cost of goods sold, which includes product, warehouse, distribution and occupancy costs, increased $19.7 million, or 16.3%, to $140.3 million for the three months ended December 31, 2011, compared with $120.6 million for the three months ended December 25, 2010.

Gross profit increased $14.9 million, or 24.9%, to $74.5 million for the fiscal 2011 fourth quarter, compared with $59.7 million for fiscal fourth quarter 2010.  Gross profit as a percentage of net sales was 34.7% for the quarter ended December 31, 2011, up from 33.1% in fiscal fourth quarter 2010.  The improvement reflects leverage on occupancy, driven by comparable sales growth and the benefit from the additional week in the quarter, as well as ongoing improvement in inventory management.

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 $9.2 million, or 19.4%, to $56.5 million for the 14 weeks ended December 31, 2011, compared with $47.4 million for the 13 weeks ended December 25, 2010.  SG&A as a percentage of net sales was 26.3% for both the fiscal 2011 and 2010 fourth quarters.  The fiscal fourth quarter 2011 included approximately $1.3 million or 0.6% of sales in non-cash store closing and impairment expenses.  SG&A as a percentage of sales, excluding the store closing and impairment expense, was 25.7% for the fiscal 2011 fourth quarter as compared to 26.3% in fiscal 2010 fourth quarter. The improvement reflects the maturation of the store base, strong comparable store sales, as well as the company’s ability to leverage costs over a larger store base and expense discipline.

Income from operations increased $5.7 million, or 46.3%, to $18.0 million for the three months ended December 31, 2011, compared with $12.3 million for the three months ended December 25, 2010.  Excluding the non-cash store closing and impairment expenses, income from operations would have been $19.3 million. Income from operations as a percentage of net sales increased to 8.4% for the fiscal 2011 fourth quarter, compared with 6.8% for fiscal fourth quarter 2010, or to 9.0% excluding the aforementioned charges.  Income from operations for the quarter ended December 31, 2011, included $3.5 million attributable to the extra week.

Net income increased $3.5 million to $9.4 million for the three months ended December 31, 2011, compared with $6.0 million for fiscal fourth quarter 2010.  This was primarily attributable to stronger sales and margin improvement as well as additional income from the extra week, partially offset by the store closing and impairment expenses and a higher tax rate.

Earnings per diluted share increased to $0.32 in fiscal fourth quarter 2011 from $0.21 per share in fiscal fourth quarter 2010.  Excluding the non-cash items and the tax adjustments, earnings per share in the quarter were $0.38, of which $0.07 per share was attributable to the extra week.

Balance Sheet and Cash Flow

During fiscal 2011, the Company paid down all of its bank debt totaling a net amount of $73 million.  Cash and equivalents at December 31, 2011 were $10.8 million.  Capital expenditures were $9.9 million in the quarter and $25.0 million for the fiscal year.  The majority of these funds were expended on new store openings.

Fiscal 2011 Highlights:
– Comparable store sales grew 7.4% on a 52-week basis
– Net sales increased 14.0%
– Operating income rose 28.8%
– Fully diluted EPS of $1.52 vs $1.03
– Opened 48 stores during the year

2012 Outlook

For the current year management expects:

• To open approximately 52 new stores
• Comparable store sales growth in mid-single digits
• Continued improvement in operating income  margin
• Capital expenditures of $32 million

 

Webcast

The Company’s conference call will be webcast at 8:30 a.m. Eastern Time (ET) today to discuss its fiscal fourth quarter 2011 results. 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 be available beginning at 10:30 a.m. ET and can be accessed by dialing 1-888-286-8010 or for international callers, 1-617-801-6888. The passcode for the replay is 45857318. The replay will be available until March 6, 2012.

About Vitamin Shoppe, Inc. (NYSE: VSI)

Vitamin Shoppe is a leading specialty retailer and direct marketer of nutritional products based in North Bergen, New Jersey.  The company sells vitamins, minerals, nutritional supplements, herbs, sports nutrition formulas, homeopathic remedies, green living products, and health and beauty aids to customers located primarily in the United States.  The company carries national brand products as well as exclusive products under the Vitamin Shoppe, BodyTech and other proprietary brands.  The Vitamin Shoppe conducts business through more than 500 company-owned retail stores, national mail order catalogs, website, www.VitaminShoppe.com and has a social community site at www.VSconnect.com.

Follow The Vitamin Shoppe on Facebook at http://www.facebook.com/THEVITAMINSHOPPE and on Twitter at http://twitter.com/VitaminShoppe.

Forward Looking Statement

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 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 described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 25, 2010 and in all filings with the Securities 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 by law.

SOURCE Vitamin Shoppe, Inc.