NBTY continues to rely on Rexall for results
stores, nutritional supplement manufacturer NBTY announced strong
results for the fiscal third quarter, thanks again mainly to the
sales of Rexall product lines.
Sales were up 30 percent for the fiscal third quarter to $400 million, compared to $308 million for the same period last year. Net income was down to $26 million or $0.37 per diluted share, compared to $29 million or $0.43 per diluted share in 2003, though the latter reflected a $4 million after-tax benefit.
However, without sales from the product lines purchased in the July 2003 Rexall acquisition, overall sales would have increased by only 8 percent during this three-month period - the Rexall lines recorded sales of $68 million. And the whole of the US Nutrition wholesale division, which operates Nature's Bounty and Rexall, increased its sales by 83 percent to $172 million, up from $94 million for the comparable period in 2003.
On the other hand, Vitamin World's sales decreased by 2 percent from $54 million a year ago to $53 million at the end of this quarter, with same store sales decreasing by 4 percent.
NBTY is aware of the difficulties it faces in this area, stating: "As we introduce more new products directly to the mass market, the specialty retail market's ability to capitalize on trends and new products is restricted".
Martin Kounitz, a S&P credit analyst had proffered a similar opinion in June, when he commented that NBTY's two months results, "represented a shift in sales to mass market customers and this is a feature of the vitamin industry as a whole."
NBTY Chairman and CEO, Scott Rudolph, expressed his disappointment in Vitamin World sales, but felt his company would be able to rise to the challenges of the market.
"We are disappointed in the continued decline in Vitamin World sales, but confident in our ability to quickly adapt to changes in the industry and remain optimistic for the long-term," he said.
Across the Atlantic, the company's European retail sales for the fiscal third quarter were solid, increasing 23 percent to $122 million from $99 million a year ago - helped in the UK by the strength of the pound.
NBTY completed its purchase of Numico's ailing vitamin business Rexall from Numico a year ago, at the end of a major acquisition spree, which included buying up supplement activities in Europe, including Numico's GNC outlets operated by the Health & Diet Group in the UK and Germany and Ahold's De Tuinen retail chain.
