Why GNC Holdings Inc's Shares Bulked Up Today

By Markets Fool.com

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

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What: Shares of GNC Holdings closed Thursday up more than 12%. The rise was been driven by GNC's strong fourth-quarter results, which beat Wall Street's expectations.

So what: GNC reported revenue of $607.2 million for its fourth quarter, which resulted in adjusted earnings of $0.61 per share. The company's top line drop $0.02 from the year-ago quarter. However, analysts had expected a worse performance, as their consensus was for $599.4 million in revenue and $0.59 in adjusted EPS.

Full-year EPS was the only primary metric to show a year-over-year improvement -- GNC's revenue for 2014 dropped by about 1% year over year to $2.613 billion, but its adjusted EPS rose 1% from the prior-year quarter's result to $2.87. That bottom-line figure topped Wall Street's consensus EPS estimate of $2.84. GNC now expects to earn approximately $3.10-$3.15 per share in its 2015 fiscal year, which is a bit weak in light of Wall Street's call for $3.15 in 2015 EPS.

Now what: Thursday's pop brings GNC back into positive territory for the past year, and its current guidance implies a forward P/E of roughly 15.5. The company also expects to produce a "low single digit increase" in same-store sales for the full year, which will result in its revenue growing to roughly $2.744 billion for 2015. That's good enough to beat Wall Street's $2.72 billion consensus, and GNC's shares offer a decent dividend to boot. I wouldn't expect explosive growth -- GNC is already a household name among the fitness set -- but slow and steady progress might be enough to justify taking a closer look.

The article Why GNC Holdings Inc's Shares Bulked Up Today originally appeared on Fool.com.

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Alex Planes has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.