Vitamin Shoppe Inc. shares fell Friday, touching their lowest level since early 2012 after a Sterne Agee analyst cut his rating for the stock to "Neutral" from "Buy," citing a recent slowdown in its website traffic and sales.
Charles Grom, who also cut his price target to $45 from $54, noted that the company's revenue at stores open at least a year have slowed considerably. He said that its 2.3 percent increase in the second quarter of this year was down from a 4.5 percent increase in the first quarter and 5.2 percent growth in the fourth quarter of 2012.
The metric is a key measure of a retailer's health, because it excludes revenue at stores that recently opened or closed.
He added that the company's recent revenue at stores open at least a year also falls below the company's 7 percent to 8 percent growth range of 2010 through 2012 and even below the 5 percent to 6 percent growth that it posted during the Great Recession.
"Overall, we find it hard to diagnose the true cause of the slowdown, particularly given VSI's resiliency during more strenuous times; as such, it is difficult to argue that same-store sales will rebound quickly," Grom wrote in a note to investors.
In midday trading, Vitamin Shoppe shares fell $1.90, or 4.5 percent, to $40.06 after dropping as low as $40.01. That was its lowest level since Jan. 9. 2012, according to FactSet.
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Original Headline: Vitamin Shoppe shares hit new low after downgrade
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