Bloomberg: Sundown Shares Fall on Earnings Outlook, Slowing Sales
Bloomberg News
November 5, 1998, 2:08 p.m. ET
Rexall Sundown Shares Fall on Earnings Outlook, Slowing Sales
Boca Raton, Florida, Nov. 5 (Bloomberg) -- Rexall Sundown
Inc. shares fell as much as 24 percent after an analyst cut his
1999 earnings estimates for the maker of vitamin and nutritional
supplements on concern that its sales are falling faster than its
weakening industry.
Shares of the maker of nutritional supplements fell 4 3/4 to
17 1/4 in midafternoon trading of 9.7 million shares, more than
eight times the three-month daily average. Earlier, the stock
touched 16 3/4.
Rexall, which had 1997 sales of $263.4 million, fell after
analyst John Mahoney at Raymond James & Associates Inc. said
latest retail data indicate the industry showed a 4 percent
decline in sales of supplements for the most recent period, while
Rexall's business fell 6 percent. It's the first time the Boca
Raton, Florida-based company has performed worse than the
industry on a sequential basis, the analyst said in a report.
Mahoney said the decline in retail sales and tough year-over-
year comparisons coming in the spring led him to lower his 1999
earnings estimates to $1.18 a share from $1.29. He cut his rating
on the stock to ''accumulate'' from ''buy.''
In late September, Rexall, which also develops and
distributes its products, said it would buy back as much as $100
million of its common stock with cash on hand since it has no
long-term debt. The stock repurchase followed a decline in the
stock prices of Rexall and its competitors on concern about
pricing pressure from mass-market retailers.
--Jennifer Farley in the Princeton newsroom (609) 279-4104 /jjs
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