Vitamin Shoppe (VSI) Plunges Aftermarket

NEW YORK (TheStreet) -- Vitamin Shoppe (VSI) plunges in aftermarket trading after peer GNC Holdings (GNC) reports weaker-than-expected 2014 guidance.

In post-market trading, shares had dropped 6.8% to $41.25.

The health and wellness retailer is due to report its own fourth-quarter earnings on Tuesday, Feb. 25.

Analysts surveyed by Thomson Reuters forecast net income of 38 cents a share on $255.38 million in revenue.

For fiscal 2013, consensus is for per-share earnings of $2.28 and $1.09 billion in sales.

Also See: GNC Holdings Plummets on Weak 2014 Guidance

TheStreet Ratings team rates VITAMIN SHOPPE INC as a Buy with a ratings score of B. The team has this to say about their recommendation:

"We rate VITAMIN SHOPPE INC (VSI) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • VSI's revenue growth has slightly outpaced the industry average of 7.0%. Since the same quarter one year prior, revenues rose by 14.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • VITAMIN SHOPPE INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, VITAMIN SHOPPE INC increased its bottom line by earning $2.02 versus $1.52 in the prior year. This year, the market expects an improvement in earnings ($2.28 versus $2.02).
  • Looking at the price performance of VSI's shares over the past 12 months, there is not much good news to report: the stock is down 27.11%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it is one of the factors that makes this stock an attractive investment.
  • The gross profit margin for VITAMIN SHOPPE INC is currently lower than what is desirable, coming in at 34.15%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 5.97% trails that of the industry average.

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