Why Vitamin Shoppe Stock Got Destroyed Today

Markets Motley Fool

What happened

Continue Reading Below

Shares of Vitamin Shoppe (NYSE: VSI) have gotten destroyed today, down by 35% as of 2:30 p.m. EDT, after the company reported disappointing second-quarter earnings.

So what

Revenue in the second quarter fell to $304.8 million, missing the consensus estimate of $314.7 million in sales. Non-GAAP earnings per share came in at $0.23, also well below the Street's forecast of $0.39. On a GAAP basis, the company lost $6.73 per share due to $168.1 million in impairment charges as well as a $13.7 million charge related to its Nutri-Force turnaround. There was also $3.4 million in costs "related to strategic initiatives."

Comparable-store sales fell 8.3%, largely driven by declines in the company's sports-related product categories.

Now what

Continue Reading Below

In a statement, CEO Colin Watts said:

The results during the quarter were disappointing and the challenges are clear. The market environment evolved more quickly than we anticipated particularly in the Sports categories. We have taken decisive actions to improve our performance directly focused on customer acquisition, price/value and customer retention with programs rolled out across the chain. Additionally, we continue to make progress on our reinvention initiatives and further cost restructuring programs that will help improve results well into 2018.

Guidance was also disappointing, as Vitamin Shoppe revised its sales outlook downward. Comps for full-year 2017 are now expected to be "negative mid-single digits," worse than its prior outlook provided in May of comps being "negative low to mid single digit."

10 stocks we like better than Vitamin Shoppe
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Vitamin Shoppe wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of August 1, 2017

Evan Niu, CFA has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.