Solgar, Wholesale Nutrition Brands Boost NBTY 3QSolgar, Wholesale Nutrition Brands Boost NBTY 3Q
August 21, 2006
BOHEMIA, N.Y.—NBTY Inc. (NYSE:NTY) posted an 8-percent increase in third quarter revenues to $475 million, due almost entirely to a $39 million growth in sales from its wholesale/U.S. nutrition division; Solgar contributed $24 million to this sales growth. Product returns were cut in half in 3Q, compared to the same period a year ago, but gross margin dipped 6 percent due to promotional incentives offered to customers. Net income for the quarter reached $30 million or $0.43 per share, almost double the $16 million or $0.23 per share in 3Q earnings last year— although last year’s income was impacted by $11 million or $0.14 in asset impairment charges.
North American retail operations experienced a slight drop in sales, off 1 percent year-over-year, primarily due to closing of under-performing stores; Vitamin World closed 26 under-performing stores and opened three new stores during 3Q 2006, for a total of 99 stores closed in the past nine months. The company (www.nbty.com) anticipates closing an additional 10 stores by fiscal year end. Similarly, European retail sales slipped 2 percent to $140 million, with same store sales virtually flat in local currency. During 3Q, four new European stores were opened, bringing the total stores in the division to 616. Sales from the Puritan’s Pride division inched up 1 percent, with the average order size increasing to $77 from $69. Online sales constituted 33 percent of total direct response/ecommerce sales NBTY’s strong financial performance allowed it to accelerate repayment of $206 million of long-term debt in the first nine months of fiscal 2006 and an additional accelerated debt repayment of $10 million in July 2006.
“The industry continues to struggle in an environment that has favorable research results with negative media headlines,” said Scott Rudolph, chairman and chief executive officer (CEO). “We will maintain an aggressive posture to increase our market share.”
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