SECAUCUS, N.J., Nov. 4, 2015 /PRNewswire/ — Vitamin Shoppe, Inc. (NYSE: VSI), a multi-channel specialty retailer and manufacturer of nutritional products, today announced preliminary results for the three months ended September 26, 2015. Total net sales in the third quarter increased 1.6% to $313.9 million compared to $308.9 million in the same period of the prior year. Reported fully-diluted earnings per share in third quarter 2015 were $0.48, compared with $0.40 in third quarter 2014. Excluding non-operating items in both periods, adjusted EPS was $0.52 and $0.47, respectively.

Commenting on the quarter’s results, Colin Watts, Chief Executive Officer of the Company stated, “I am pleased with the progress we are making in view of ongoing industry softness, and that we delivered year over year improvement in earnings per share. While we still faced some challenges for topline growth in the quarter, our comparable sales improved when compared with the prior quarter. Additionally, we are encouraged by the ongoing year over year increase in product gross margins.”

Mr. Watts added, “Looking ahead, we have begun to test, and in some cases, scale several new demand creation initiatives tied to our reinvention strategy that we expect will be important contributors to revenue growth beginning in 2016. We are well along with this process and anticipate sharing our multi-year reinvention strategy and long term business outlook in early 2016.”

Third Quarter 2015 Results

Sales growth in the quarter was primarily driven by growth from non-comp stores. Retail comparable sales were 0.1% and e-commerce comparable sales were up 0.6%. Retail sales growth was partially offset by a decrease in manufacturing third-party sales. The company opened 15 stores in the quarter and closed one.

Cost of goods sold, which includes product, distribution, manufacturing and store occupancy costs, decreased $2.4 million, or 1.2%, to $209.2 million for the three months ended September 26, 2015, compared with $211.6 million for the three months ended September 27, 2014.

Gross profit increased $7.4 million, or 7.6%, to $104.7 million for 2015 third quarter, compared with $97.3 million for third quarter 2014. Gross profit as a percentage of net sales was 33.4% in third quarter 2015, up from 31.5% in 2014. Excluding the impact of last year’s purchase accounting charge of $3.3 million for Nutri-Force, gross margin in third quarter 2015 was up approximately 80 basis points as higher product margins were partially offset by deleverage on store occupancy costs.

Selling, general and administrative expenses (SG&A), including operating payroll and related benefits, advertising expense and depreciation and amortization increased $4.6 million, or 6.0%, to $81.4 million for the quarter ended September 26, 2015, compared with $76.7 million for the quarter ended September 27, 2014. SG&A includes approximately $1.0 million of reinvention cost and $0.6 million of integration-related costs. SG&A for third quarter 2014 includes integration related expenses of approximately $0.3 million. Excluding these items for both periods, SG&A as a percent of revenue was 25.4% in third quarter 2015 and 24.8% in third quarter 2014. This increase in SG&A rate was driven by Nutri-Force, higher store payroll and benefits, and depreciation and amortization expense.

Income from operations in third quarter 2015 of $23.4 million compared to $20.5 million in the same period of the prior year. As a percentage of net sales, income from operations was 7.4% for third quarter 2015 compared with 6.7% for third quarter 2014. Adjusted for the items noted above in both periods, including the Nutri-Force purchase accounting, income from operations as a percentage of sales was 8.0% in third quarter 2015 and 7.8% in third quarter 2014.

Net income was $14.1 million for third quarter 2015 compared to $12.2 million in the same period of the prior year. Reported earnings per diluted share were $0.48 in third quarter 2015 compared with $0.40 in third quarter 2014. Adjusted EPS was $0.52 for third quarter 2015 and $0.47 for third quarter 2014.

Balance Sheet and Cash Flow
Cash and equivalents at September 26, 2015 were $2.0 million. During the quarter the Company paid $10 million on the line of credit leaving $8.0 million drawn at quarter end.

Capital expenditures were $9.6 million in the quarter. Funds were primarily expended on new stores and IT investments.

During the quarter the Company repurchased 355,021 shares of its common stock for a total purchase price of $12.4 million. As of September 26, 2015, the Company had repurchased 2,253,392 shares for a total of $95.8 million.

2015 Outlook
Management expects the following for 2015:

• Net sales increase of approximately 5%
• Total comparable sales growth to be approximately flat
• 50 new stores
• Adjusted earnings per diluted share in the range of $2.05 to $2.15 for the full-year 2015. This excludes the impact of non-operating items and assumes completion of the 2014 share buyback program.

Non-GAAP Financial Measures

Adjusted information is non-GAAP financial information provided to enhance the user’s overall understanding of the Company’s performance and related trends. The Company provides a reconciliation of adjusted financial information to the GAAP financial results in Table 4 titled “Supplemental Operating Data”.

Webcast
Management will host a conference call to discuss the third quarter 2015 results at 8:30a.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. A telephonic replay will be available beginning at 11:30 a.m. ET on November 4, 2015 and can be accessed by dialing 1-877-870-5176 or 1-858-384-5517 for international callers. The passcode for the replay is 9463025. The telephonic replay will be available until 11:59 p.m. ET on November 11, 2015. The webcast will also be archived on the company’s website at www.vitaminshoppe.com in the investor relations section.

About the Vitamin Shoppe, Inc. (NYSE:VSI)
Vitamin Shoppe is a multi-channel specialty retailer and contract manufacturer of nutritional products based in Secaucus, New Jersey. In its stores and on its websites, 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 products from approximately 850 national brands, the Vitamin Shoppe also carries products under The Vitamin Shoppe^®, BodyTech^®, True Athlete^®, MyTrition^®, plnt™, ProBioCare™, Next Step™, Betancourt and Nutri-Force Sports^® brands. The Vitamin Shoppe conducts business through more than 700 company-operated retail stores under The Vitamin Shoppe, Super Supplements and Vitapath retail banners, and primarily 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
This press release contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including without limitation, statements under the caption “2015 Outlook”, statements regarding future financial results and performance, share repurchases, future business prospects, revenue, new stores, product offerings, integration of acquisitions, working capital, liquidity, capital expenditures, capital needs and interest costs, industry based factors, including the level of competition in the vitamin, mineral and supplement industry, continued demand from the primary markets the Company serves, consumer perception of the Company’s products, the availability of raw materials, as well as economic conditions generally and factors more specific to the Company such as compliance with manufacturing regulations, certifications and practices and restrictions imposed by the Company’s revolving credit facility, including financial covenants and limitations on the Company’s ability to incur additional indebtedness and the Company’s future capital requirements, and other risks, uncertainties and factors set forth under Item 1A., entitled “Risk Factors”, in the Company’s Annual Report on Form 10-K for the fiscal year ended December 27, 2014 and in the Company’s other reports and documents filed with the SEC. These forward-looking statements can be identified by the use of words such as “outlook”, “believes”, “expects”, “potential”, “continues”, “may”, “will”, “should”, “seeks”, “predicts”, “intends”, “plans”, “estimates”, “anticipates”, “target”, “could” or the negative version of these words or other comparable words. These statements are subject to various risks and uncertainties, many of which are outside the Company’s control, including, among others 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, the availability of raw material and other specific factors discussed herein and in other Company SEC filings (including reports on Forms 10-K and 10-Q filed with the SEC). The Company believes that all forward-looking statements are based on reasonable assumptions when made; however, it is impossible to predict actual results or outcomes or the effects of risks, uncertainties or other factors on anticipated results or outcomes with certainty and that, accordingly, one should not place undue reliance on these statements. Forward-looking statements speak only as of the date when made and the Company undertakes no obligation to update these statements in light of subsequent events or developments. Actual results may differ materially from anticipated results or outcomes discussed in any forward-looking statement.

SOURCE Vitamin Shoppe, Inc.