GNC Holdings Inc (GNC)’s Stock Is Heading Up

GNC Holdings Inc (NYSE:GNC) operates as a retailer of health and wellness products. The company was founded way back in 1935, and has since risen to prominence in the fitness industry. The massive company, headquartered in Pittsburgh, currently has more than 8,200 locations, of which more than 6,200 are in the United States.

GNC most recently reported revenue of approximately $2.5 billion. This was accompanied by an EBITDA of nearly $491.0 million. The corporation has been able to consistently increase the amount of revenue being brought in throughout the past few years, as shown by the chart below.

GNC Revenue Quarterly data by YCharts

At the moment

In its most recent 10-Q, GNC reported quite impressive results. Revenue jumped about 6% from $624 million to $665 million. Net income also increased, going from $64 million to $73 million. Clearly, the company is being guided in the right direction toward growth and success. GNC uses a plan consisting of five goals to become a successful company:

–Grow company retail earnings

–Expand company-owned square footage

–Expand international footprint

–Expand e-commerce business

–Further leverage the GNC brand

Management has no doubt been organized and effective in their efforts to improve the company. As a result of these ambitious goals, a great amount of progress was made by GNC Holdings Inc (NYSE:GNC) in a few different areas. Just to name a few:

–Same-store sales increased 1.9%, including an 18.8% increase from the GNC.com business (which clearly indicates that the goal of expanding e-commerce was met.)

–32 net new stores were added in the first quarter of 2013.

–Retail segment sales increased 5.0%, and operating income increased 5.8%.

–Franchising revenue increased 6.3%, and operating income rose 11.6%.

These are only a few of the multitudinous statistics that support the idea that GNC is successfully expanding and improving operations.

Looking forward

Is this type of growth sustainable? For GNC, yes, it is. GNC has been a leader in the health and wellness industry for years, and has experienced little-to-no trouble obtaining and keeping a large share of the market. The industry is expected to grow at an average annual rate of 6.5% through 2020. This should not be a surprise to anyone, as we all go through life seeing the growing influence and encouragement of living a healthy lifestyle, which is supported by everyone from the government, to corporations, to non-profit organizations.

Luckily, GNC will be able to benefit from this obsession with health that is becoming prevalent in our nation. GNC, though, is likely to grow at an even faster rate than the industry because of the leadership position and “disproportionate market share”  that the company holds when it comes to health and wellness. Also, over the next five years, GNC plans to increase the number of its international franchise stores.