Thean, TWLB info....
_____
TWINLAB CORP. (TWLB) 12 5/8 -4. The problems in the vitamins, herbs and sports nutrition supplements field continue as Twinlab in the latest casualty to announce a slowing of demand. Late yesterday, the company said that it expects Q4 earnings to come in well below Wall Street expectations of $0.41 a share. According to Twinlab, it expects a Q4 net of between $0.23 and $0.26 a share on sales of $85 to $90 million due to excess levels of inventory in the mass market due to large initial purchase orders in the first half of 1998. The company also attributes increasing inventories in the health food channel for its sales and earnings problems. The earnings shortfall is nothing new to this sector as just two weeks ago, Weider Nutrition International (WNI 5 13/16 -3/4) announced a similar earnings shortfall. In WNI's case, results were being hurt by excess returns and sales credits, which seems to be also occurring at Twinlab, although the company does expects these excess inventory levels to be worked off and place the company in a better position to forecast order levels during 1999. However, the company is also experiencing production problems for its new TruHerbs product line as an outside vendor is having packaging equipment problems. This latter issue is expected to be ongoing through 1999, which does not bode well for futures results either, although the company seems to think that it can resume sales growth of 20% in 199 with earnings growth of 20% to 25%. In either case, the investor attraction that these issues once commanded seems to be over as the stock prices of this group has been trending lower for the past two quarters.
|
