GNC Guides higher, Stock Jumps After Hours

As we approach the 1 year anniversary of GNC’s (NYSE: GNC) trading debut at $16.60 per share last April 1st we were greeted this afternoon by even better guidance from a company that has put in a stunning performance already gifting shareholders with a near doubling of their money.  The stock closed today at $31.35 on very low volume trading in a tightening consolidation band between $31 and $33.50 per share since mid-February.   That is likely to change when trading opens tomorrow as the company had to revise guidance for the first quarter of 2012 up yet again after raising earnings estimates from $0.41 to $0.49 per share.

The stock popped in after-hours trading to $32.75 on the announcement.  Stores at least a year old have outperformed even last month’s expectations of growing 8 to 9 percent.  The company’s guidance on Monday stated that growth of these stores would be in the mid-teens.  No wonder the stock jumped after hours.

Given that kind of under-estimation one can pretty much throw out both the company’s previous guidance for 2012 of $1.82 per share and Wall St.’s $1.86 consensus.  From a trader’s perspective, though, the question will be whether a new high can be established and maintained above $33.50 especially if the markets do not get suitably dovish commentary from The Fed tomorrow.  All signals point to a great year for a company hitting all the right notes right now.



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Tom Luongo

About Tom Luongo

Tom Luongo is a professional chemist and self-taught economist who has been following and trading stocks for nearly 12 years. He has no formal ties to the financial industry and considers that an asset in his analysis of the interplay between monetary policy and capital markets.

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