Nutritional supplements retail chain GNC Holdings Inc. says bringing its e-commerce platform in-house is starting to pay off.
GNC, No. 187 in the Internet Retailer 2017 Top 500, reported e-commerce accounted for 10.2% of its sales in the U.S. and Canada during the third quarter ended Sept. 30, or $51.7 million. That’s an increase of 20.0% from $43.1 million during the same time last year, when e-commerce accounted for 8.2% of overall sales.
Through the first nine months of 2017, e-commerce accounted for 9.7% of GNC’s sales in the U.S. and Canada, or $155.5 million, which is up 3.4% from $150.4 million during the same period last year, when e-commerce accounted for 9.0% of overall sales.
The retailer recently completed a project during the second quarter bring its e-commerce platform in-house, having previously used an unspecified third party to host it. The change has made a notable difference in the site’s performance and its digital team’s ability to service shoppers, executives say.
“This allowed us to introduce new features resulting in more flexibility to add enhancements, including advanced personalization and improved merchandising, the benefits which are evident in our sales results,” CEO Ken Martindale told analysts on the retailer’s Q3 earnings call on Thursday, according to a transcript from Seeking Alpha. Martindale was hired last month from drugstore chain Rite Aid Corp., where he had been CEO of Rite Aid Stores.
Martindale and chief financial officer Tricia Tolivar told analysts that the retailer’s decision to open a storefront on Amazon.com Inc.’s (No. 1) marketplace this year has been crucial to GNC’s online sales growth.
“We are finding that Amazon activity is [attracting a] significant number of new customers, which is very encouraging to us and something we continue to look forward to in the future,” Tolivar said. “We are not commenting on what [sales on] Amazon is doing separately or giving information regarding GNC.com on a stand-alone basis. What I can share is GNC.com is performing well versus the prior year and we are very pleased with the performance we are seeing on Amazon, and it continues to grow.”
- Net sales of $609.5 million, down 2.9% from $628.0 million during the same time last year.
- Sales in the U.S. and Canada of $507.1 million, down 3.5% from $525.5 million.
- Same-store sales, including e-commerce, grew 1.3%, compared with an 8.6% decline.
- Net income of $21.5 million compared with $32.4 million.
For the first nine months of 2017, GNC reported:
- Total sales of $1.895 billion, down 3.8% from $1.970 billion during the same time last year.
- Sales in the U.S. and Canada of $1.603 billion, down 4.1% from $1.671 billion.
- Net income of $61.0 million compared with $147.2 million.