Summary Points:
- Specialty retailer that has grown at double-digit growth rates has been stalling.
- Trades at a discount to historical multiples and to its major competitor GNC.
- Potential catalysts: Sale of GNC, Sale
of VSI, Activist, Operational improvement.
Vitamin Shoppe (NYSE:VSI) is a specialty retailer of vitamins, minerals, herbs, supplements, sports nutrition and other health and wellness products. Over 80% of its revenues are generated via its 771 stores (“Retail”), 10% online (“Direct”) and around 7% from manufacturing via Nutri-Force which it acquired in 2014.
With only $1.2 billion in last twelve months sales, the company appears to have room to grow. In their 10-K, management points out that the Vitamins, Minerals, Supplements (VMS) industry is $36bn (according to the Nutrition Business Journal), while another contributor on Seeking Alpha mentioned that it is $18bn (based on IBIS World). Until 2014 the company has been a growth story with double digit annual increases in sales and constantly improving margins. For the last 5-years, sales, operating income and EPS have grown at 11%, 10% and 15% annually.
