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GNC Holdings Suspends Dividend! Earnings Call Review

Published Fri, 17 Feb 2017 09:33:24 -0500 on Seeking Alpha

Today's Earnings call from GNC Holdings (NYSE: GNC) was unwelcome news for those long the stock. No matter how hard the new interim CEO tried to spin the One New GNC, the numbers told a different story.
The company reported a 4th quarter diluted loss of $6.40 and on an adjusted basis a profit of $.07 cents with $471M non cash impairment charge on long lived assets. In other words: inventory we cannot sell.
The company's sales are down 12% in all of their domestic stores and it seems as if management is correct in their statement that they have lost touch with their customer base. They clearly have their work cut out for them going forward. This is a no touch stock for a couple quarters at a minimum in my view.
While I personally like to buy certain stocks in capitulation, I believe this is one to avoid for now.
It is becoming clear in the retail sector that the power of Amazon (Nasdaq: AMZN) is killing many retail outlets. Why go to a GNC when you can find the same product on Amazon for less money?
A look at the charts showing the demise of GNC.

According to management it will take several quarters for them to understand how their new business strategy will work. To be fair, they said that in the few weeks they have been able to analyze the data that sales were up 7%. In my opinion that is not going to get it done.
Is GNC a Short?
I personally would not short it here at this price. As a matter of fact it could be set up for a potential... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
GNC HOLDINGS 4.26   0.0 -2.10 0.00 18.52


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