Vitamin Shoppe: Next Step is our most ambitious private label launch to date
Speaking with investors during its Q4 2013 earning call, Tony Truesdale, CEO of Vitamin Shoppe, explained that Next Step is starting to arrive in stores and with the marketing launch planned for spring.
“Next Step offers our customers a customizable weight management solution for wherever they are on their wellness journey,” he said. “We have developed delicious meal replacement shakes and high quality supplements that help boost metabolizers the main control appetite. Next Step is about finding the right combination of healthy diet and exercise that works best free to our customers.
“[It] is our most ambitious launch to-date.”
Vitamin Shoppe has been investing heavily in product development, label redesign, and sub-brands, including True Athlete, MyTrition, plnt, and ProBioCare.
“We continue to say that our private label penetration is kind of in the mid-20s. We've done some things in some other categories to expand those categories, so we're kind of in that 20 to 22 range per penetration,” said Truesdale.
Sports and fish oil
When asked about category performance, Truesdale said that sports nutrition has been a good growth category for the company for a number of years.
However, there has been a softening in fish oil sales, he said. “Fish oil […] was a high growth by margin category the year before, which is much softer than we anticipated. So when you think those different category pieces together you are seeing some higher margin category slow a little bit some lower margin growth categories grow a little bit faster and that's kind of what's happening.”
The overall results for 2013 were good, said Truesdale, with the company exceeding the billion milestone in total net sales, with comparable store sales increasing for the 20th consecutive year.
Specifically for Q4 2013, the company posted sales increases of 17% and growth in its e-commerce business of 25%.
“So in conclusion we have an attractive business model with many growth opportunities ahead of us, including omni-channel, product development, e-commerce, and new store development,” he said. “We will continue to make the investments that will enhance our customers overall experience in stores, online, and through mobile devices.”
Despite a very rosy set of reports for 2013, the weather has detrimentally impacted performance at the start of 2014, said Brenda Galgano, CFO.
“Weather is negatively impacting customer traffic so far this year,” she said. “More than three quarters of the store base has been impacted to varying degrees by severe weather. As a result, our expectation is that the total comp for the first quarter will be in the low-single-digit.
“Sales in stores not impacted by weather combined with our current e-commerce growth supports our outlook for a mid-single-digit total comp for the full year.”