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Keeping in line with the strategy to fortify its hold on high-potential geographical regions, GNC Holdings, Inc. (NYSE:GNC) recently announced plans to expand presence in India. In India, the company operates in collaboration with the master franchise partner — Guardian Healthcare Services Pvt. Ltd.
Per the latest announcement, Guardian will add GNC Holdings’ products to 4000-plus stores across India by 2020. In this regard, 1000 new stores are expected to shelf GNC products in 2018 compared with approximately 50 retail locations at present. This apart, GNC Holdings has been targeting other channels like retailing, e-commerce and distribution for expansion.
International Business — A Key Growth Driver
GNC Holdings’ international business has been a key growth driver for the company in recent years. Revenues at this segment increased 14.1% on higher cross-border e-commerce sales in China last quarter.
Of late, the company has been experiencing solid growth in China. In this regard, GNC Holdings recently announced plans of entering into a strategic partnership and joint venture agreement with Harbin Pharmaceutical Group Holding Co., Ltd. Meanwhile, the company has witnessed improvement in trends in Mexico, South Korea and Hong Kong.
Market Potential
Per a report by the Associated Chambers of Commerce and Industry in India (ASSOCHAM), India's nutraceutical market is estimated to value $10 billion by 2022, seeing a CAGR of approximately 20%, during the forecast period of 2017−2022. Thus, in view of such data, we believe GNC Holdings’ aggressive expansion plans in India are strategic.
Share Price Performance
In the past three months, GNC Holdings has been underperformed its industry. The stock has lost 14.6% compared with the industry’s decline of 1.1%. We believe this latest development will help the stock to rebound.
Zacks Rank & Key Picks
GNC Holdings carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical sector are PerkinElmer (NYSE:PKI) , Bio-Rad Laboratories (NYSE:BIO) and athenahealth, Inc. (NASDAQ:ATHN) .
Bio-Rad Laboratories sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The company has a long-term expected earnings growth rate of 20%.
athenahealth is a Zacks #1 Ranked player. The company has a long-term expected earnings growth rate of 21.5%.
PerkinElmer has a long-term expected earnings growth rate of 12.3%. The stock carries a Zacks Rank #2 (Buy).
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