February 11, 2009, 12:00 AM

NBTY reports a 55% web sales lift for Q1 of FY 2009

Nutritional supplements manufacturer and retailer NBTY posted $23 million in web sales for Q1 of fiscal 2009, up 55% from the prior year quarter. Net income fell 71% because of higher operating costs.

Mark Brohan

Research Director

Nutritional supplements manufacturer and retailer NBTY Inc. reported $23 million in web sales for the first quarter of fiscal 2009, a 55% increase from $14.8 million in the prior year quarter.

The web accounted for 47% of sales for NBTY’s direct response and e-commerce business unit, which increased sales by 32% to $49 million in the first quarter from $37 million in Q1 of fiscal 2008. The web contributed 40% of direct sales in the first quarter of fiscal 2008, the company says. Online sales growth was attributed to NBTY’s continuing efforts to garner greater online consumer sales and “to capitalize on the continuing surge in shopping via the web.”

Overall net sales for the fiscal first quarter ended December 31, 2008, were $661 million compared with $511 million in the prior year quarter, an increase of $150 million or 29%. Net sales from Leiner Health Products and Julian Graves, two acquisitions completed in Q4 of fiscal 2008, are included. NBTY is No. 155 in the Internet Retailer Top 500 Guide.

Overall net income for Q1 FY 2009 was $13.5 million, down 71% compared with $46 million in the same quarter of fiscal 2008. NBTY says the decline in net income “reflects lower gross profit margins due to higher raw material costs which were not offset by higher prices charged to customers, weakness in foreign exchange rates, and the costs associated with the write-off and termination of direct response information technology programs, which were ineffective and uneconomical.”

The newly purchased and unidentified computer and Internet applications were deemed “ineffective in generating new customers and were discontinued,” the company says. As a result, NBTY says it took an $8.6 million pre-tax charge.

Puritan.com is NBTY’s flagship nutritional supplements e-commerce site. Others include HollandandBarrett.com, VitaminWorld.com and NaturesBounty.com.


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