Though Vitamin Shoppe's sales fell, CEO Colin Watts says he sees encouraging signs, such as an increase in unique visitors.

Increased digital ad spend didn’t translate into an increase in online sales during the third quarter for multichannel nutritional supplements retailer The Vitamin Shoppe.

Vitamin Shoppe, No. 234 in the Internet Retailer 2017 Top 500, reported that total sales declined 8.5% during the third quarter ended Sept. 30 to $288.2 million from $314.9 million a year ago.

Vitamin Shoppe did not report dollar figures for its e-commerce sales, but said it posted a 5.0% Q3 year-over-year decline in sales through VitaminShoppe.com, its flagship website, compared with a 1.7% gain. Through the first nine months of the year, e-commerce sales are down 11.6% compared with a 6.8% gain in the year-ago period.

Vitamin Shoppe spent more on paid search and performance marketing during the quarter than it did last year, CEO Colin Watts told analysts on the retailer’s Q3 2017 earnings call last week, though he did not specify dollar figures.

The additional spending didn’t translate into sales, but Watts said he saw signs of progress during the quarter,according to a transcript from Seeking Alpha.

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“In total, for the quarter, we saw an 18 percentage point improvement in our new customer acquisition trends compared to the first half of the year,” he said, meaning the company is bringing in more new customers compared to last year. “Traffic to our website also improved and was positive for the first time this year with unique visits increasing at a high single-digit pace.” A Vitamin Shoppe spokeswoman could not immediately be reached for comment on website traffic numbers.

Web traffic data from data measurement firm SimilarWeb shows that traffic to VitaminShoppe.com declined year over year from July through September (Q3), but the retailer posted successive month-over-month traffic gains in 2017, with traffic growing by 1.4% in August compared with July and 1.4% in September compared with August.

Contributing to the retailer’s online sales decline, Watts said, is the fact that more Vitamin Shoppe online orders are now picked up in stores.

“With the growth of buy online, pick up in store, approximately 12% of the orders generated from our website were picked up in the store, negatively impacting VitaminShoppe.com year-over-year (online) sales by 3% to 4%, as those sales are credited to the stores,” he said.

For the third quarter ended Sept. 30, Vitamin Shoppe reported:

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  • Net sales of $288.2 million, down 8.5% from $314.9 million during the same time last year.
  • Comparable sales, including e-commerce, declined 6.6%, compared with a 1.9% decline.
  • A year-over-year e-commerce comparable sales consisting of sales completed through VitaminShoppe.com decline of 5.0%, compared with a 1.7% gain.
  • A net loss of $86.2 million, compared with a gain of $11.4 million.

For the first nine months of 2017, Vitamin Shoppe reported:

  • Net sales of $909.9 million, down 7.6% from $984.4 million during the same time last year.
  • Comparable sales, including e-commerce, declined 7.1%, compared with a 0.5% decline.
  • A year-over-year e-commerce comparable sales decline of 11.6%, compared with a 6.8% gain.
  • A net loss of $234.6 million, compared with a gain of $36.6 million.