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GNC Holdings Partners Rapid Nutrition, Forays in Australia

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Moving ahead strongly with its focus on international expansion, GNC Holdings, Inc. (GNC - Free Report) has recently announced plans to foray in Australia. To that end, the company has already entered into a master franchise agreement with Rapid Nutrition.

This alliance will help GNC Holdings market, sell and distribute its products via retail outlet expansion, e-commerce and other potential distribution channels throughout Australia. This apart, Rapid Nutrition will be able to distribute its own brands with the aid of GNC global network.

Notably, Rapid Nutrition is one of the leading distributors of health and wellness products down under. The company is focused on research and development, manufacturing and distribution of weight-loss and diet management products, sports nutrition products, vitamins and dietary supplements alongside a range of life science products.

Rapid Nutrition already has an established presence in Australia. Accordingly, GNC Holdings expects this partnership to fuel the company’s entry and expansion into the large Australian market. Taking into consideration Australia’s booming healthcare market, we believe this development to be strategic for GNC Holding’s international expansion plan. Per Euromonitor, Australia's consumer health market was approximately $3.1 billion in 2017.

International Business — A Key Growth Driver

Notably, GNC Holdings’ international business has been a key growth driver at the company in recent years. Management hopes to continue capitalizing on global revenue growth opportunities by adding franchise stores in the existing markets, expanding into new high-growth markets and growing product distribution in both the existing as well as new markets.

Revenues at the international segment increased 14.1%, driven by higher cross-border e-commerce sales in China in the last quarter. While growth was primarily estimated from e-commerce business in China, the company has lately witnessed improvement in trends in Mexico, South Korea and Hong Kong.

Last month, GNC Holdings shared of plans to expand presence in India. The company operates in collaboration with the master franchise partner Guardian Healthcare Services Pvt. Ltd. in India. Per this announcement, Guardian will add GNC Holdings’ products to 4000-plus stores across the Indian territory by 2020. Also, GNC Holdings informed to enter into a strategic partnership and joint venture agreement with China’s Hayao.

Share Price Performance

 

 

In the past three months, shares of GNC Holdings have outperformed its industry. The stock has lost 1.5% compared with the industry’s decline of 14%. We believe this latest development to help rebound the stock.

Zacks Rank & Key Picks

GNC Holdings carries a Zacks Rank #5 (Strong Sell).

A few better-ranked stocks in the broader medical sector are athenahealth, Inc. (ATHN - Free Report) , Bio-Rad Laboratories, Inc. (BIO - Free Report) and Centene Corporation (CNC - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see  the complete list of today's Zacks #1 Rank stocks here.

athenahealth has an expected long-term growth rate of 17.7% and the current-year metric is pegged at 52.8%.

Bio-Rad has an expected long-term growth rate of 20% and the current year’s stands at 42.9%.

Centene has an expected long-term growth rate of 14.4% and the same for 2018 is projected at 43.1%.

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