GNC gets sales boost from own brands and new strategy

PITTSBURGH — A commitment to own brands helped buoy first quarter results, GNC reported last week, as well as a new element to the company's omnichannel strategy — a GNC storefront on Amazon that is exceeding its initial expectations.

"Looking at the first quarter results from the ONE New GNC, we are encouraged and excited by the progress of the business," Bob Moran, GNC interim CEO, told analysts last week. "Our goal was to bring consumers back to GNC with simplified competitive pricing, compelling loyalty programs, innovative and exclusive products, and a dramatically improved customer experience."

"We are also focused on reinvigorating private-label innovation, which has historically been a competitive strength," he said. "This work includes developing new products and formulas that address unmet customer needs and expanding customer brands like Beyond Raw, Mega Men, Women's Ultra Mega and GNC Probiotics," Moran noted. "Innovation is the key to our product assortment and we are working to optimize the assortment."

Overall, GNC's new market strategies are working, he said. "It's clear that customers are coming back to our stores. In the first quarter, transactions in our company-owned stores were up 9.3%, the strongest growth this company has seen in years," he said. "We are also pleased with our GNC.com business, which while down 7% is a significant improvement compared to the down 49% that we experienced in the fourth quarter. We are encouraged with this performance and continue to aim for positive comps from this group in the back half of the year."

In addition to improved performance at GNC.com, the company's Amazon.com Marketplace is outperforming sales expectation and is leading with strong sales of GNC branded products. "Specifically with Amazon, we are seeing a very high mix of GNC branded products," Tricia Tolivar, GNC CFO, reported. "The consumer shopping on Amazon is looking for GNC and those products have very high margins. So we are able to leverage that on the store front with Amazon."

 

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