NBTY 3Q revenue up 22%

7/28/2009

RONKONKOMA, N.Y. NBTY last week posted net sales of $652 million for its third quarter ended June 30, an increase of 22%. However, overall gross profit margins fell to 45% from 51% in NBTY’s fiscal third quarter 2008, reflecting an on-going trend of private-label sales constituting a greater portion of the company’s overall sales. This is the first quarter that NBTY’s nutritional supplement private-label business of Leiner Health, acquired July of last year, has been fully integrated into NBTY’s operational results.

Private label sales traditionally have a lower gross profit and, accordingly, overall gross profit margin decreased.

Net sales for the NBTY’s Wholesale/U.S. Nutrition division, which in addition to Leiner  includes NBTY’s key retail brands like Nature's Bounty, Osteo Bi-Flex, Rexall, Sundown, Ester-C and Solgar, increased 40% to $396 million.

Sales of Leiner private label products are outpacing overall category growth, NBTY noted — NBTY’s wholesale offerings reported a 10.5% increase for the 13 weeks ended June 27 across food, drug and mass channels, citing Nielsen Group data, as compared to 9.8% growth for the entire category.

Speaking to NBTY’s fiscal success, Harvey Kamil, president and CFO, appeared Monday morning on the Fox Business Morning C-Suite Sit-Down. Asked if dietary supplements were an expendable expense in a down economy, Kamil replied, “People look at their nutritional supplements [as] non-discretionary. They want to stay healthy.”

The core demographic shopping dietary supplements — baby boomers over the age of 50 — are particularly concerned about their health and disease prevention, Kamil added.

“We are answering the demand,” he said. “It’s a science-based industry … fish oil, vitamin D, news comes out almost every day about the benefits of these nutritional supplements. So as the science comes out, the market will move [and] consumers will be buying these products.”

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