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Vitamin Shoppe, Inc
by Brian BolanJanuary 11, 2012 | Comments : 0 Recommended this article: (0)
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Vitamin Shoppe is a retailer of nutritional products like vitamins, minerals, supplements, homeopathic remedies and other similar items. The company owns approximately 500 stores and also sells through catalogs and its website.
Positive Earnings Surprise
VSI has beaten the Zacks Consensus Earnings Estimate in five of the last six earnings releases and met expectations one time. The average beat for 2011 has been 16% ahead of expectations, an amount that gets the attention of aggressive growth investors.
Earnings per share for the most recent quarter came in at $0.40, $0.07 ahead of the Zacks Consensus Earnings Estimate of $0.33. That beat was fully 21% ahead of expectations. Since that time, three more analysts have contributed their earnings to the consensus, and the expectation of $0.32 is one cent below the prior quarters expectation.
Management Speaking 1/12/12
Speaking at the start of earnings season is inherently risky. Should the conference get cancelled or a plane not make it on time, the lack of a presentation can be interpreted negatively. A smooth presentation that has a good tone and positive answers to investors questions can lead to further confidence for earnings outperformance. We note that this is not a brokerage related conference.
Shares of VSI are not cheap by most metrics, trading at a premium to both trailing and forward PE when compared to the industry. The real metric that stands out is the price to sales, with VSI trading at 1.45x trailing twelve months sales while the industry trades at only 0.4x sales. We believe that VSI is trading at a significant premium to the industry due to its currently low market share rate of 2.2% and the expectation that its market share will rise.
VSI has a limited public operating history, but the positive earnings surprises and increases in earnings help make the stock a Zacks #1 Rank (Strong Buy). A look at the earnings surprise chart show that management has done a good job of managing expectations.
Brian Bolan is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Home Run Investor service
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