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GNC CEO Joe Fortunato on the strong sales for vitamins and nutritional supplements despite the struggling economy and the company’s domestic and int...
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Is jobs report showed gains in private sector jobs -- -- is adding more than a hundred new stores and creating.
Hundreds of jobs Joseph fortune auto is the CEO he is joining us exclusively live from Pittsburgh Pennsylvania and you've got a great story because you just recently went public in the spring and the stock has -- what 65% recent -- people love this stuff in good times and bad.
Let's talk about what you think is really driving your profits in your business.
Well I think there's a number segments that are driving our business and then -- really -- -- -- retail sector which you know this year will deliver over 9% comparable store sales -- But we are also experiencing double digit growth and our manufacturing operations.
Driven by those retail sales for our international operations as well into an RE commerce business is growing -- over 30%.
Right Joseph this stuff is not -- our our producers went out and bought some of this stuff for the store show -- -- think the degree arrangement of products we have.
This arrangement cost about a hundred boxes not -- produce yeah about a lot 150 X 250 dollars.
Are you surprised that in this economy so many people out of work and and kind of a sluggish growth that people are still paying that much.
No actually quite the opposite if you look at the cost of health care today.
And that and people at times when -- unemployed many -- times take better care of themselves and see and with the fitness trends and the as operational.
Growth in the industry in regards to people taken better care of themselves.
To spend a hundred dollars on products in a month is -- -- cheap way to keep yourself physically fit so we look at it as.
Of people were very much in tune with what they need to do to stay healthy they're very much in line with how they want to stay healthy and we're big part of that.
Yeah I did the forty dollar fish oil tablets we have they really wanna bring down the cholesterol of course but it's true people don't have the money perhaps to to pay doctors so they're trying to stay healthier but.
Let's talk about your actual growth plans.
This year alone -- -- about a hundred months forty stores you plan to open another 160 by 2012 how do you avoid how do you make sure that you don't.
Cannibalize from other stores.
Or particularly that you don't over extend and find yourself in a Starbucks 2009 situation where they had to close stores because they have too many.
Well we have over 3800 corporate and franchise stores in the United States.
And we continue to see -- this year and you like you said in the range of -- 140 store openings and we watch those stores as they perform every month.
So we watch that the trends are what we expect to see and we -- the stores around them and how they're trending to make sure.
That we -- not cannibalizing and we feel there is still market opportunity here clearly the numbers dictate that and that's why you'll see additional growth.
Of a 160 stores domestically next year but also another 14050.
Stores on the international front.
Hey Joseph the FDA has been making some noise about whether or not it's gonna start regulating more heavily than are already has.
The vitamin industry does that concern you at all.
I really doesn't we've had that you know I've been here twenty years and over the course of twenty years we've always had some kind of saw.
-- stores the FDA becoming more involved we have always been a big supporter.
Of adverse event reporting.
Consumer good manufacturing practices.
So we are an advocate of making sure that we are delivering quality products to our customers.
And that this industry is as safe as it can be.
So the FDA at times comes about in.
Want to make inroads into.
Regulating the industry the industry as well regulated now under a lot it was passed back in 1994 called the -- And the FDA has a lot authority to do with they'd like to do and obviously companies like GNC.
Want to see the high quality players in the industry and the people that do not represent the industry well not here.
It's about a three billion dollar market cap if you bought in April Europe's 65%.
-- fortune auto is the man at the -- -- not a muscle -- though are you.
I'm not but I do stay fit regularly -- worked out and acts and -- if you think of our customer base today.
It is more about people that are fit short the demographic -- -- expanded from.
What we used to think where the body builders to a very much.
Trended aspiration of consumer anywhere from fifteen to 5060 years -- that are just working now exercising daily eating right I took better care them.
You know it's it's my wife that lays out all the vitamins in front of me every morning -- let her take care -- -- all I think that happens a lot of damage Joseph thanks a lot of great to see it.
You're welcome thank you very much happy holidays.
