GNC’s online sales drop 29% in Q4
February 17, 2017 11:37 AM
Total sales are shrinking for health products retailer GNC Holdings Inc. and e-commerce sales are becoming a smaller part of those sales.
GNC, No. 166 in the Internet Retailer 2016 Top 500 Guide, said e-commerce accounted for 8.8% of its sales in the U.S. and Canada in the fourth quarter of 2016, or $41.6 million, down 29.0% from $58.6 million during the same time the year before, when e-commerce accounted for 11.4% of sales in the region.
Total sales in the U.S. and Canada dropped to $472.6 million during the quarter, down 8.0% from $513.7 million in Q4 2015.
The retailer has launched initiatives aimed at turning things around. GNC began selling its products on Amazon.com Inc. (No. 1) last month in hopes of broadening its online reach.
“We are also seeing online sales begin to improve, and the GNC store on Amazon, which launched on Jan. 12 is gaining traction,” interim CEO Robert Moran told analysts on the retailer’s Q4 2016 earnings call, according to a transcript from Seeking Alpha. Moran, who has served on the retailer’s board of directors, has been interim CEO since late July, when Michael Archbold left the retailer for unspecified reasons.
In December the retailer also rolled out One New GNC, an omnichannel initiative that aims to provide shoppers with a uniform price on all products sold online and offline.
“In the One New GNC [plan], we're no longer asking customers to sort through up to five different prices for the same product,” Moran said. “Now, customers will find standardized, competitive pricing across all our platforms.”
For the fourth quarter ended Dec. 31, GNC reports:
- Net revenue of $569.9 million, down 9.4% from $629.1 million in Q4 2015.
- A same-store sales decline, including e-commerce, of 12.0%.
- Revenue in the U.S. and Canada of $472.6 million, down 8.0% from $513.7 million.
- A net loss of $433.4 million, compared with a $42.9 million profit. GNC says the loss is primarily due to charges for goodwill impairment and write-downs on property and equipment.
For 2016, GNC reported:
- Net revenue of $2.540 billion, down 5.3% from $2.683 billion in 2015.
- Revenue in the U.S. and Canada of $2.144 billion, down 4.3% from $2.241 billion.
- A net loss of $286.3 million, compared with a $219.3 million profit.