Manufacturing Mishap Hurts Vitacost.com’s First Quarter

Vitacost.com, which sells vitamins, supplements, and over-the-counter products, manged to grow its sales 25%, to $57.2 million, during the first quarter. But the merchant’s net income dropped 32%, to $2.5 million, from $3.7 million.

What happened? According to a company release, back orders temporarily increased on select NSI proprietary products during the latter half of the first quarter, primarily due to a manufacturing logistics issue at its Lexington, NC, plant.

As a result, Vitacost.com estimates that $1.0 to $1.2 million of revenue shifted from the first quarter to the second quarter. What’s more, the company identified about $1.2 million in canceled orders during the first quarter.

Vitacost.com CEO Ira Kerker said in a release he is disappointed with the company’s first-quarter results. But he noted that “our management team has taken the necessary steps to correct the short-term manufacturing logistics situation and we remain on target to eliminate the production bottleneck by the end of the second quarter.”

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