The FDA crackdown on stimulant DMAA will not have a big impact on supplements giant NBTY, said chief executive Jeff Nagel on an earnings call last week.
Asked by analysts during NBTY's Q2, 2012 conference call to outline the firm's exposure to DMAA, Nagel confirmed that NBTY did sell some DMAA-containing pre-workout products made by other manufacturers at its Vitamin World stores.
'Candidly... this is not a significant impact'
But he added: “Look. The first point for us is that we do not manufacture any products that contain DMAA… In total, DMAA-containing products represent less than a half of a percent of all the sales of NBTY…
“So at this stage, like many other resellers, we are actively seeking out products that have alternatives to DMAA and we’re confident that those are going to be available and we’re monitoring the situation closely.
“But candidly, for our franchise, this is not a significant impact.”
NBTY continues to ‘significantly outperform’ the market
As for NBTY's second quarter performance, strong growth from key brands was partially offset by “softness, primarily as a result of pricing pressure” in its private label business, said chief financial officer Michael Collins.
“But we’re making sure we have acceptable margins from these key [private label] accounts as we go forward.”
Meanwhile, NBTY continued to “significantly outperform the market”, he said.
“Nielsen data for the 13 weeks to March 31 showed sales of VMHS in the FDMx [food, drug and mass merchandise stores excluding Walmart] channel grew 5.3% while NBTY recorded a 13.8% rise in sales in this channel over the same period.”
NBTY also gained share in the diet and sports nutrition category, he claimed. “The category grew 14.9% and NBTY’s sales in the category grew 17%.”
Pockets of inflation: Whey, CoQ10, natural vit E
Asked about input costs, Collins said NBTY was seeing inflation in whey and CoQ10, natural vitamin E and some agricultural oils.
Q2, 2012, results breakdown
NBTY posted net profits of $34.2m in the three months to March 31, 2012, compared with a net loss of $20.2m in the same period in 2011. Net sales were up 9% to $770.4m.
Net sales in NBTY’s Wholesale/US Nutrition division (which supplies branded products including Ester-C, Solgar, Nature’s Bounty and Pure Protein and private label products for leading retailers) were up 11.1% to $449.05m.
Net sales in the European retail arm (which includes Holland & Barrett and Julian Graves in the UK, De Tuinen in Netherlands and Nature’s Way in Ireland) were up 4.6% to $187.22m, while net sales in the direct Response/E-Commerce channel were up 9.5% to $71.83m.
North American Retail net sales (Vitamin World stores in the US, Le Naturiste stores in Canada) were up 7.7% to $62.29m.