GNC Holdings, Inc. Reports Second Quarter 2016 Results

  • Reported EPS increased to $0.94 per diluted share compared with $0.79 per diluted share for the comparable prior year quarter. Second quarter 2016 adjusted EPS increased to $0.79 per diluted share compared with $0.77 per diluted share for the comparable prior year quarter.
  • Same store sales decreased 3.7% in the second quarter 2016 compared with the second quarter 2015.
  • Robert F. Moran appointed interim CEO replacing Mike Archbold who is leaving the Company.
  • Earnings guidance suspended for fiscal 2016.

PITTSBURGH - July 28, 2016 /PRNewswire - GNC Holdings, Inc. (NYSE: GNC) (the "Company")  reported consolidated revenue of $673.2 million, a decrease of 2.4% as compared with consolidated revenue of $689.6 million for the second quarter of 2015.  As previously announced, beginning in the second quarter of 2016 the Company changed its reportable segments.  Revenue in the U.S. & Canada segment decreased by 2.0%, revenue in the International segment decreased 2.5%, and revenue in the Manufacturing/Wholesale segment, excluding intersegment sales increased 5.3%.

Same store sales decreased 3.7% in domestic company-owned stores (including GNC.com sales) in the second quarter of 2016.  In domestic franchise locations, same store sales decreased 6.6% in the second quarter of 2016.

For the second quarter of 2016, the Company reported net income of $64.0 million compared with net income of $67.4 million in the second quarter of 2015. Diluted earnings per share were $0.94 for the second quarter of 2016, compared with diluted earnings per share of $0.79 in the second quarter of 2015. Adjusted EPS, excluding the benefit of a $16.9 million pre-tax gain related to the sale of 86 company-owned stores to franchisees, were $0.79 for the second quarter of 2016 compared with adjusted EPS of $0.77 in the comparable prior year quarter.

Earlier today, the Company also announced the appointment of Robert F. Moran as Interim Chief Executive Officer.  Mr. Moran replaces Mike Archboldwho is leaving the Company.  Mr. Moran commented, "Our results for the quarter were disappointing and we are focused on addressing those areas where we can drive a meaningful impact on the business in the shortest period of time.  We clearly have work to do to reverse the current trends, but I am confident in our business and the GNC brand and I am committed to working closely with our talented team to deliver improved performance.  As we do so, we will continue the previously announced comprehensive review of strategic and financial alternatives."

Segment Operating Performance

U.S. & Canada (Includes: Company-owned stores in the U.S., Puerto Rico and Canada, franchise stores in the U.S. and e-commerce)

For the second quarter of 2016, the U.S. & Canada segment revenue decreased $11.7 million, or 2.0%, to $570.9 million compared with $582.6 million in the prior year quarter.  The segment's revenue decline is due to decreases in same store sales in both company-owned and franchise stores. Domestic same store sales declines of 3.7%, which includes GNC.com, were primarily due to continued negative trends in the vitamin and food/drink categories, which more than offset the timing of the Easter holiday (March in the current year compared with April in the prior year) around which sales historically are low.  Our all store promotional events were not enough to offset the unexpected decline in retail traffic late in the quarter.

Domestic franchise revenue decreased $1.9 million to $86.5 million in the current quarter compared with $88.4 million in the prior year quarter due to lower wholesale sales and royalties as an overall decline more than offset the earlier timing of our annual franchise convention, which resulted in higher sales in the current quarter as compared with the prior year quarter. Our franchisees did not participate in all corporate promotions and our expanded assortment initiative has been adopted by approximately half of our franchise stores compared with the significant majority of our corporate stores as ofJune 30, 2016; as a result, our franchisees reported lower retail same store sales as compared with our corporate stores, or negative 6.6% in the second quarter of 2016.   

Operating income decreased slightly to $104.5 million for the three months ended June 30, 2016 compared with $105.5 million for the same period in 2015.  Operating income as a percentage of segment revenue was 18.3% in the current quarter compared with 18.1% in the prior year quarter. Excluding refranchising gains of $16.9 million and $1.1 million in the current quarter and prior year quarter, respectively, operating income decreased to $87.7 millioncompared with $104.4 million and was 15.4% and 17.9% of segment revenue.  The decrease in operating income percentage was due primarily to lower product margin rate in our GNC.com business and expense deleverage associated with negative same store sales.  

International (Includes: Franchise locations in approximately 50 countries, The Health Store and China operations)

Revenues in our International segment decreased $1.1 million, or 2.5%, to $43.1 million in the current quarter compared with $44.2 million in the prior year quarter.  Wholesale sales and royalties from franchisees decreased by $2.6 million primarily relating to Mexico, Turkey and Chile, partially offset by the earlier timing of our annual franchise convention, which resulted in higher sales in the current quarter compared with the prior year quarter.  Our international franchisees reported negative same store sales of 1.6% in the current quarter excluding the impact of foreign exchange rates relative to the U.S. dollar.  Partially offsetting the decrease in revenue was an increase in revenue of $1.5 million associated with our China business.

Operating income decreased $2.1 million, or 13.0%, to $13.6 million for the three months ended June 30, 2016 compared with $15.7 million in the prior year quarter.  Operating income was 31.7% of segment revenue in the current quarter compared with 35.5% in the prior year quarter.  The decrease in operating income percentage was primarily due to a bad debt allowance with a franchisee recorded in the current quarter along with the comparative effect of the reversal of a previously established bad debt allowance with a franchisee in the prior year quarter.  In addition, a foreign currency loss of $0.4 million was recorded in the current quarter.

Manufacturing / Wholesale (Includes: Manufactured product sold to other segments, third-party contract manufacturing and sales to wholesale partners)

Revenues in our Manufacturing / Wholesale segment, excluding intersegment sales, increased $3.0 million, or 5.3%, to $59.2 million compared with $56.2 million in the prior year quarter.  Third-party contract manufacturing sales increased $5.2 million, or 18.3%, to $33.7 million for the quarter compared with$28.5 million in the prior year quarter.  This increase was partially offset by a decrease in wholesale sales of $2.2 million, or 8.1%. Intersegment sales decreased $16.4 million from $73.0 million in the prior year quarter to $56.6 million in the current quarter primarily due to lower proprietary sales.

Operating income decreased $3.2 million, or 15.0%, to $17.9 million for the three months ended June 30, 2016 compared with $21.1 million in the prior year quarter.  Operating income as a percentage of segment revenue decreased from 16.3% in the prior year quarter to 15.5% in the current quarter primarily due to lower intersegment sales, which resulted in unfavorable manufacturing variances, and a higher mix of third-party contract manufacturing sales, which generally contribute lower margins.

Refranchising Store Strategy

Consistent with its previously announced refranchising strategy, the Company completed the conversion of 86 corporate stores during the second quarter of 2016, of which 84 stores were sold to one franchisee, and recorded a pre-tax gain of $16.9 million.  The Company remains on track to meet its 2016 goal to refranchise 200 company-owned stores.   

Year-to-Date Performance

For the first six months of 2016, the Company reported consolidated revenue of $1,342.1 million, a decrease of 2.1% compared with consolidated revenue of $1,370.8 million for the first six months of 2015. Revenue in the U.S. & Canada segment decreased by 1.4%, revenue in the International segment decreased 4.6%, and revenue in the Manufacturing/Wholesale segment increased 4.4%, excluding intersegment sales.

For the first six months of 2016, the Company reported net income of $114.8 million, compared with net income of $130.6 million for the first six months of 2015. Diluted earnings per share were $1.62 for the first six months of 2016, compared with diluted earnings per share of $1.50 in the first six months of 2015.

Operating Metrics

As of June 30, 2016, the Company had 3,506 corporate stores in the U.S. and Canada, 1,163 domestic franchise locations, 2,343 Rite Aid franchise store-within-a-store locations and 2,075 international stores. The Company now has 9,087 store locations worldwide.

For the first six months of 2016, the Company generated net cash from operating activities of $130.9 million and invested $20.8 million in capital expenditures. The Company generated free cash flow of $110.5 million (which it defines as cash provided by operating activities less cash used in investing activities excluding acquisitions).  As of June 30, 2016, the Company's cash and cash equivalents were $48.2 million and long-term debt was$1.59 billion.

Dividends

The Company's Board of Directors declared a cash dividend of $0.20 per share of its common stock for the third quarter of 2016. The dividend will be payable on or about September 30, 2016 to stockholders of record at the close of business on September 16, 2016.  The Company currently intends to pay regular quarterly dividends; however, the declaration of such future dividends is subject to the final determination of the Company's Board of Directors.

2016 Outlook

As the Company conducts its evaluation of the business under new leadership and develops an appropriate course of action to deliver improved results, it has suspended its previous earnings guidance for fiscal 2016.

Mr. Moran stated, "The decision to suspend our fiscal 2016 guidance in no way detracts from our commitment to move quickly to deliver improved performance.  We remain confident in GNC's long-term prospects but believe it is prudent to suspend guidance as we identify actions to address the challenges we are currently facing in our business."

Conference Call

GNC has scheduled a live webcast to report its second quarter 2016 financial results on July 28, 2016 at 8:30 a.m. Eastern time. To participate on the live call listeners in North America may dial (888) 259-8387 and international listeners may dial (913) 981-5544. In addition, a live webcast of the call will be available on www.gnc.com via the Investor Relations section under "About GNC." A replay of this webcast will be available through August 25, 2016.

About GNC Holdings, Inc.

GNC Holdings, Inc.  (NYSE: GNC) - Headquartered in Pittsburgh, PA - is a leading global specialty health, wellness and performance retailer.

The Company's foundation is built on 80 years of superior product quality and innovation. GNC connects customers to their best selves by offering a premium assortment of health, wellness and performance products, including protein, performance supplements, weight management supplements, vitamins, herbs and greens, wellness supplements, health and beauty, food and drink and other general merchandise. This assortment features proprietary GNC - including Mega Men®, Ultra Mega®, Total LeanTM, Pro Performance®, Pro Performance® AMP, Beyond Raw®, GNC Puredge®, GNC GenetixHD®, Herbal Plus® - and nationally recognized third-party brands.

GNC's diversified, multi-channel business model generates revenue from product sales through company-owned retail stores, domestic and international franchise activities, third-party contract manufacturing, e-commerce and corporate partnerships. As of June 30, 2016, GNC had more than 9,000 locations, of which more than 6,700 retail locations are in the United States (including 2,343 Rite Aid franchise store-within-a-store locations) and franchise operations in approximately 50 countries.

Forward-Looking Statements Involving Known and Unknown Risks and Uncertainties

This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the Company's financial condition, results of operations and business that is not historical information. Forward-looking statements can be identified by the use of terminology such as "subject to," "believes," "anticipates," "plans," "expects," "intends," "estimates," "projects," "may," "will," "should," "can," the negatives thereof, variations thereon and similar expressions, or by discussions regarding our dividend, share repurchase plan, strategy and outlook. While GNC believes there is a reasonable basis for its expectations and beliefs, they are inherently uncertain.  The Company may not realize its expectations and its beliefs may not prove correct. Many factors could affect future performance and cause actual results to differ materially from those matters expressed in or implied by forward-looking statements, including but not limited to unfavorable publicity or consumer perception of our products; costs of compliance and any failure on our part to comply with new and existing governmental regulations governing our products; limitations of or disruptions in our manufacturing system or losses of manufacturing certifications; disruptions in our distribution network; or failure to successfully execute our growth strategy, including any inability to expand our franchise operations or attract new franchisees, any inability to expand our company-owned retail operations, any inability to grow our international footprint, any inability to expand our e-commerce businesses, or any inability to successfully integrate businesses that we acquire.  The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Actual results could differ materially from those described or implied by such forward-looking statements. For a listing of factors that may materially affect such forward-looking statements, please refer to the Company's  Annual  Report  on  Form  10-K  for  the  year  ended  December  31,  2015.

The Company is authorized to repurchase from time to time shares of its outstanding common stock on the open market or in privately negotiated transactions. The Company may finance any repurchases with cash, potential financing transactions, or a combination of the foregoing.  The timing and amount of stock repurchases will depend on a variety of factors, including the market conditions as well as corporate and regulatory considerations. The share repurchase program may be suspended, modified or discontinued at any time and the Company has no obligation to repurchase any amount of its common stock under the program. The Company intends to make all repurchases in compliance with applicable regulatory guidelines and to administer the plan in accordance with applicable laws, including Rule 10b-18 and, as applicable, Rule 10b-5 of the Securities Exchange Act of 1934, as amended.

Management has included as an operational metric same store sales, which is a commonly used statistical measure in the retail industry and is important to the understanding of the Company's performance.  Same store sales growth represents the percentage change in same store point-of-sale retail sales in the period presented compared with the prior year period.  Same store sales are calculated on a daily basis for each store and exclude the net sales of a store for any period if the store was not open during the same period of the prior year.  The Company includes its internet sales of GNC.com in the domestic retail company-owned same store sales calculation.  When a store's square footage has been changed as a result of reconfiguration or relocation in the same mall or shopping center, the store continues to be treated as a same store.  If, during the period presented, a store was closed, relocated to a different mall or shopping center, or converted to a franchise store of a company-owned store, sales from that store up to and including the closing day or the day immediately preceding the relocation or conversion are included as same store sales as long as the store was open during the same period of the prior year.  The Company excludes sales during the period presented that occurred on or after the date of relocation to a different mall or shopping center or the date of a conversion. 

Management has included non-GAAP financial measures in this press release because it believes they represent an effective supplemental means by which to measure the Company's operating performance.  Management believes that net income and earnings per share, adjusted to exclude gains on refranchising and certain prior period expenses as reflected in this release, and free cash flow are useful to investors as they enable the Company and its investors to evaluate and compare the Company's results from operations in a more meaningful and consistent manner by excluding specific items which are not reflective of ongoing operating results.  However, these measures are not measurements of the Company's performance under GAAP and should not be considered as alternatives to earnings per share, net income or any other performance measures derived in accordance with GAAP, or as an alternative to GAAP cash flow from operating activities, or as a measure of the Company's profitability or liquidity.  For more information, see the attached reconciliations of non-GAAP financial measures.

GNC HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Income

(in thousands, except per share amounts)

 
 

Three months ended
June 30,

 

Six months ended
June 30,

 

2016

 

2015

 

2016

 

2015

 

(unaudited)

Revenue

$

673,218

   

$

689,564

   

$

1,342,123

   

$

1,370,829

 

Cost of sales, including warehousing, distribution and
occupancy

434,520

   

433,232

   

867,580

   

865,064

 

Gross profit

238,698

   

256,332

   

474,543

   

505,765

 

Selling, general, and administrative

138,984

   

140,090

   

282,056

   

279,858

 

Gains on refranchising

(16,885)

   

(1,149)

   

(17,900)

   

(1,491)

 

Other loss (income), net

375

   

(247)

   

98

   

155

 

Operating income

116,224

   

117,638

   

210,289

   

227,243

 

Interest expense, net

15,275

   

11,644

   

29,718

   

23,159

 

Income before income taxes

100,949

   

105,994

   

180,571

   

204,084

 

Income tax expense

36,921

   

38,637

   

65,728

   

73,457

 

Net income

$

64,028

   

$

67,357

   

$

114,843

   

$

130,627

 

Earnings per share:

             

Basic

$

0.94

   

$

0.79

   

$

1.63

   

$

1.51

 

Diluted

$

0.94

   

$

0.79

   

$

1.62

   

$

1.50

 

Weighted average common shares outstanding:

             

Basic

68,176

   

85,501

   

70,627

   

86,677

 

Diluted

68,303

   

85,777

   

70,760

   

86,934

 

Note: The presentation of certain amounts in the consolidated financial statements of prior periods have been revised to conform to the current periods presented with no impact on previously reported net income or stockholders' equity.

GNC HOLDINGS, INC. AND SUBSIDIARIES

Reconciliation of Net Income and Diluted EPS to Adjusted Net Income and Adjusted Diluted EPS

(in thousands, except per share data)

(Unaudited)

 
 

Three months ended
June 30,

 

2016

 

2015

 

Net
Income

 

Diluted
EPS

 

Net
Income

 

Diluted
EPS

Reported

$

64,028

   

$

0.94

   

$

67,357

   

$

0.79

 

Gains on refranchising

(16,885)

   

(0.25)

   

(1,149)

   

(0.02)

 

Other SG&A related to legal accrual and reversal of
international franchise receivable reserve

   

   

(652)

   

(0.01)

 

Tax effect

6,643

   

0.10

   

659

   

0.01

 

Adjusted

$

53,786

   

$

0.79

   

$

66,215

   

$

0.77

 
               

Weighted average diluted common shares outstanding

68,303

       

85,777

     
                   
                   
                   
 

Six months ended 
June 30,

 

2016

 

2015

 

Net
Income

 

Diluted
EPS

 

Net
Income

 

Diluted
EPS

Reported

$

114,843

   

$

1.62

   

$

130,627

   

$

1.50

 

Gains on refranchising

(17,900)

   

(0.25)

   

(1,491)

   

(0.02)

 

Other SG&A related to legal accrual and reversal of
international franchise receivable reserve

   

   

1,187

   

0.02

 

Correction of an immaterial error

   

   

2,762

   

0.03

 

Tax effect

7,655

   

0.11

   

(885)

   

(0.01)

 

Adjusted

$

104,598

   

$

1.48

   

$

132,200

   

$

1.52

 
               

Weighted average diluted common shares outstanding

70,760

       

86,934

     

 

GNC HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands)

 
 

June 30,

 

December 31,

 

2016

 

2015

 

(unaudited)

Current assets:

     

Cash and cash equivalents

$

48,220

   

$

56,462

 

Receivables, net

158,349

   

142,486

 

Inventory

602,679

   

555,885

 

Deferred income taxes

10,927

   

10,916

 

Prepaid and other current assets

40,730

   

27,114

 

Total current assets

860,905

   

792,863

 

Long-term assets:

     

Goodwill

646,796

   

649,892

 

Brands

720,000

   

720,000

 

Other intangible assets, net

115,181

   

119,204

 

Property, plant and equipment, net

222,956

   

230,535

 

Deferred income taxes

3,358

   

3,358

 

Other long-term assets

33,416

   

38,555

 

Total long-term assets

1,741,707

   

1,761,544

 

Total assets

$

2,602,612

   

$

2,554,407

 

Current liabilities:

     

Accounts payable

$

185,767

   

$

152,099

 

Current portion of long-term debt

4,550

   

4,550

 

Deferred revenue and other current liabilities

127,859

   

121,062

 

Total current liabilities

318,176

   

277,711

 

Long-term liabilities:

     

Long-term debt

1,590,193

   

1,444,628

 

Deferred income taxes

305,650

   

304,491

 

Other long-term liabilities

57,348

   

59,016

 

Total long-term liabilities

1,953,191

   

1,808,135

 

Total liabilities

2,271,367

   

2,085,846

 

Stockholders' equity:

     

Common stock

114

   

114

 

Additional paid-in capital

918,479

   

916,128

 

Retained earnings

1,144,795

   

1,058,148

 

Treasury stock, at cost

(1,725,349)

   

(1,496,180)

 

Accumulated other comprehensive loss

(6,794)

   

(9,649)

 

Total stockholders' equity

331,245

   

468,561

 

Total liabilities and stockholders' equity

$

2,602,612

   

$

2,554,407

 

 

GNC HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands)

 
 

Six months ended 
June 30,

 

2016

 

2015

 

(unaudited)

Cash flows from operating activities:

     

Net income

$

114,843

   

$

130,627

 

Adjustments to reconcile net income to net cash provided by operating activities:

     

Depreciation and amortization expense

28,209

   

28,628

 

Amortization of debt costs

6,245

   

925

 

Stock-based compensation

2,949

   

3,080

 

Gains on refranchising

(17,900)

   

(1,491)

 

Changes in assets and liabilities:

     

Decrease (increase) in receivables

15,121

   

(459)

 

(Increase) in inventory

(53,073)

   

(348)

 

(Increase) in prepaid and other current assets

(11,715)

   

(4,624)

 

Increase in accounts payable

36,751

   

17,549

 

Increase in deferred revenue and accrued liabilities

6,558

   

11,687

 

Other operating activities

2,901

   

(1,379)

 

Net cash provided by operating activities

130,889

   

184,195

 
       

Cash flows from investing activities:

     

Capital expenditures

(20,809)

   

(20,131)

 

Refranchising proceeds

1,831

   

1,051

 

Store acquisition costs

(1,395)

   

(962)

 

   Net cash used in investing activities

(20,373)

   

(20,042)

 
       

Cash flows from financing activities:

     

Borrowings under revolving credit facility

182,000

   

 

Payments on revolving credit facility

(40,000)

   

 

Payments on term loan facility

(2,275)

   

(2,400)

 

Debt issuance costs

(1,712)

   

 

Proceeds from exercise of stock options

305

   

1,075

 

Gross excess tax benefits from stock-based compensation

156

   

475

 

Minimum tax withholding requirements

(622)

   

(423)

 

Cash paid for treasury stock

(229,169)

   

(164,798)

 

Dividends paid to shareholders

(27,974)

   

(31,017)

 

   Net cash used in financing activities

(119,291)

   

(197,088)

 
       

Effect of exchange rate changes on cash and cash equivalents

533

   

(121)

 

Net increase in cash and cash equivalents

(8,242)

   

(33,056)

 

Beginning balance, cash and cash equivalents

56,462

   

133,834

 

Ending balance, cash and cash equivalents

$

48,220

   

$

100,778

 

 

GNC HOLDINGS, INC. AND SUBSIDIARIES

Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow

(in thousands)

 
 

Six months ended 
June 30,

 

2016

 

2015

 

(unaudited)

Net cash provided by operating activities

$

130,889

   

$

184,195

 

Capital expenditures

(20,809)

   

(20,131)

 

Refranchising proceeds

1,831

   

1,051

 

Store acquisition costs

(1,395)

   

(962)

 

       Free cash flow

$

110,516

   

$

164,153

 
       

 

GNC HOLDINGS, INC. AND SUBSIDIARIES

Segment Financial Data

(in thousands)

 
 

Three months ended
June 30,

 

Six months ended

 June 30,

 

2016

 

2015

 

2016

 

2015

 

(in thousands)

Revenue:

             

U.S. and Canada

$

570,943

   

$

582,584

   

$

1,145,543

   

$

1,161,522

 

International

43,077

   

44,159

   

79,919

   

83,783

 

Manufacturing / Wholesale:

             

Intersegment revenues

56,556

   

72,984

   

119,587

   

139,238

 

Third-party

59,198

   

56,233

   

116,661

   

111,757

 

Subtotal Manufacturing / Wholesale

115,754

   

129,217

   

236,248

   

250,995

 

Total reportable segment revenues

729,774

   

755,960

   

1,461,710

   

1,496,300

 

Other

   

6,588

   

   

13,767

 

Elimination of intersegment revenues

(56,556)

   

(72,984)

   

(119,587)

   

(139,238)

 

Total revenue

$

673,218

   

$

689,564

   

$

1,342,123

   

$

1,370,829

 

Operating income:

             

U.S. and Canada

$

104,549

   

$

105,519

   

$

190,850

   

$

206,073

 

International

13,649

   

15,694

   

26,752

   

31,908

 

Manufacturing / Wholesale

17,891

   

21,060

   

36,324

   

41,067

 

Total reportable segment operating income

136,089

   

142,273

   

253,926

   

279,048

 

Unallocated corporate and other costs:

             
               

Corporate costs

(19,865)

   

(23,547)

   

(43,626)

   

(49,324)

 
                       

Other

   

(1,088)

   

(11)

   

(2,481)

 

Subtotal unallocated corporate and other costs

(19,865)

   

(24,635)

   

(43,637)

   

(51,805)

 

Total operating income

$

116,224

   

$

117,638

   

$

210,289

   

$

227,243

 
               

Segment operating income %:

             
               

U.S. and Canada

18.3%

 

18.1%

 

16.7%

 

17.7%

International

31.7%

 

35.5%

 

33.5%

 

38.1%

Manufacturing/Wholesale

15.5%

 

16.3%

 

15.4%

 

16.4%

Consolidated

17.3%

 

17.1%

 

15.7%

 

16.6%

               

Comp store sales - domestic, including
GNC.com

(3.7)%

 

(2.7)%

 

(3.2)%

 

(3.5)%

 

GNC HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Store Count Activity

 
 

Six months ended
June 30,

 

2016

 

2015

U.S. & Canada

     

Company-owned(a):

     

Beginning of period balance

3,584

   

3,487

 

   Store openings

30

   

47

 

   Acquired franchise stores(b)

10

   

20

 

   Franchise conversions(c)

(90)

   

(7)

 

   Store closings

(28)

   

(17)

 

End of period balance

3,506

   

3,530

 

Domestic Franchise:

     

Beginning of period balance

1,084

   

1,070

 

   Store openings

13

   

13

 

   Acquired franchise stores(b)

(10)

   

(19)

 

   Franchise conversions(c)

90

   

7

 

   Store closings

(14)

   

(4)

 

End of period balance

1,163

   

1,067

 

International(d):

     

Beginning of period balance

2,095

   

2,150

 

   Store openings

43

   

36

 

   Store closings

(63)

   

(83)

 

End of period balance

2,075

   

2,103

 

Store-within-a-store (Rite Aid):

     

Beginning of period balance

2,327

   

2,269

 

   Store openings

19

   

36

 

   Store closings

(3)

   

(1)

 

End of period balance

2,343

   

2,304

 

Total Stores

9,087

   

9,004

 
 
           
 

(a) Includes Canada.

(b) Stores that were acquired from franchisees and subsequently converted
into company-owned stores.

(c) Company-owned store locations sold to franchisees.

(d) Includes franchise locations in approximately 50 countries (including distribution
centers where sales are made) and 10 locations of The Health Store.

SOURCE GNC Holdings Inc.

Investor Contacts:

Amy Greene
Vice President
Investor & Government Relations
(412) 288-4744

John Mills
Partner - ICR
(646) 277-1254

###

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