6 Reasons Vitamin Shoppe Likely To Remain Under Pressure

Vitamin Shoppe Inc VSI shares have recovered slightly after falling dramatically after a disappointing first quarter that saw earnings per sales come in well below consensus estimates.

Barclays analyst Karen Short noted the large EPS miss was due to an increase in promotional activity within the sports business in March and April. While management has indicated the competitive environment may be temporary, that may be just an overly optimistic view.

“It is quite possible the environment remains challenging for longer than expected,” said Short in a new analyst note.

6 Reasons Vitamin Shoppe May Continue To See Pressure

1. The sports customer is price sensitive and not loyal.
2. Vitamin Shoppe's prices are at a slight premium to online en mass.
3. The vendors are large.
4. Online and mass players are growing in relevance.
5. Sports includes largely commoditized products.
6. 70 percent of Vitamin Shoppe’s sales are for replenishment purposes.

Barclays maintains an Equal-Weight rating on the stock but has lowered its price target to $13 from $24.

At last check, shares of Vitamin Shoppe were down 3.46 percent at $12.55.

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