GNC Holdings (NYSE:GNC) shares took a tumble today on the NYSE after reporting lower-than-expected earnings. The retail stock brought in disappointing numbers but announced an investment from International Vitamin Corporation simultaneously that might have saved the stock from sinking further.
GNC Q4 and Full Year 2018 Earnings
For Q4 2018, GNC Holdings brought in a net income of $58.8 million and $69.8 million for the full year in 2018. The company’s domestic sales decreased by -0.6% but its international sales spiked and its revenue increased by +12%. GNC Holding’s international sales increased in China, Mexico, and South Korea.
GNC’s diluted earnings per share (EPS) was $0.62 in Q4 compared with a loss of -$3.03 in Q4 2017. The company posted wider-than-expected Q4 loss on its same-store sales, which likely caused the stock to drop over -12% today. However, GNC recently closed on a number of key investments that could pull the company and its stock up.
Harbin and International Vitamin Corp Investments
Last month, GNC Holdings and Harbin Pharmaceutical Group Holdings announced the news of a strategic venture agreement between both companies. Per the press release, Harbin would invest around $300 million into GNC, becoming the largest shareholder in the company. Harbin Pharmaceuticals is a top pharmaceutical company in China.
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In addition to the investment from Harbin, this morning GNC announced the closing of an additional investment with the International Vitamin Corporation (IVC). IVC is a global leader in vitamins and nutritional supplements. This new agreement would integrate GNC’s manufacturing division with IVC. Under the terms of the agreement, GNC will receive $101 million in exchange for the net assets of the Nutra and Anderson manufacturing facilities. In addition, IVC will retain an initial 43% ownership of the investment.
Despite the decrease in earnings and dropping GNC stock today, the company’s new investments should likely boost the health retailer’s progress in 2019.
GNC Holdings Stock Movement
According to Yahoo Finance, GNC is trading at $2.84 a share on the NYSE, down -$0.42 (-12.88%). With the closing of recent investments, the stock has the potential to make a comeback in 2019.
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