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Bear of the Day: GNC (GNC)

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Every couple of years or so I get the itch to “get my swole on.” That’s my goofy way of saying I get sick and tired of being sick and tired and decide to get in the gym and exercise. This may sound healthy but I have a tough time doing things in moderation. If I’m going to do something I go big. So when I decide it’s time to get back in shape I get a strict diet, I work out a lot, and I get in shape really fast. Then I get lazy and go back to burgers like 6 weeks later.

Part of this process usually involves me taking a trip to GNC (GNC - Free Report) to load up on protein powders. They always get me to sign up for their membership and I wind up leaving the store with two bulging bags and a $200 receipt. Needless to say, it’s the only trip I ever make there because I always decide being fat is more fun.

While I’m spending that money to get back in shape for a month, there’s never anyone else in the store. I don’t think I’ve ever seen another person in the GNC. Maybe once there was someone shopping for herbal supplements but never the high margin gold label stuff they sell.

Personal shopping experience and lack of discipline aside, GNC Holdings has had a very tough time lately. A precipitous drop in late October took eth stock from $20 to $13. Since then, earnings estimates have continued to decline, pushing the stock down to a Zacks Rank #5 (Strong Sell) and making it today’s Bear of the Day.

Over the last sixty days, seven analysts have dropped their earnings estimates for the current year and next year. The negative sentiment has pushed down our Zacks Consensus Estimate from $2.75 to $2.51 for the current year while slashing next year’s consensus from $2.77 to $2.29.

The industry ranks in the Bottom 6% of our Zacks Industry Rank. There is no other stock in the industry ranked higher than a Zacks Rank #3 (Hold). Two of those names include Herbalife (HLF - Free Report) and Rite Aid (RAD - Free Report) .

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