The last quarter, revenue and net income growth continued. Estimates for the next year also indicate decent growth. For 2013, the revenues are expected to be $2.66 billion (9.4% growth). The earnings per share is expected at $2.80 (~23% growth). The stock performance has been amazing and the run can be expected to continue. Despite the fact that GNC stock has grown from less than $20 to more than $45 in two years, it still trades at P/E of around 19, and the price to sales ratio is 1.8. Expectations of growth are evident from the forward P/E (fye Dec 31, 2014) of 13.57 and a low PEG (5 year) of 0.8. To continue the growth in revenues, GNC has to bring out new products from time to time. This has to be in line with its current product mix but it can remain open to new segments. New successful products show great growth during the inital phase of their launch. ChromaDex corporaton (CDXC) recently launched a low caffeine energy drink PURENERGY containing its patented ingredient pterostilbene in combination with Caffeine. The combination molecule, which is also patented by ChromaDex, increases the half life of caffeine by 6 to 8 times leading to sustained levels of energy at much lower doses. The proprietary ingredient of ChromaDex has already been part of a successful product BluScience which was sold for $6.2 million recently. Barry Honig increased his stake in the ChromaDex immediately after the launch of the new product. GNC also needs to focus on cost rationalization so that the margins are sustained and improved. For the quarter ending Mar 31, gross margins were 38.5% and the net margins for the quarter were 10.9%. The revenues and net income grew by 6.5% and 13.8% respectively (yoy). The net profit margin on a ttm basis is in excess of 10%.
