GNC 2012 Annual Report Download - page 59

Table of Contents
The following trends and uncertainties in our industry could affect our operating performance as follows:
broader consumer awareness of health and wellness issues and rising healthcare costs may increase the use of the products we offer and
positively affect our operating performance;
interest in, and demand for, condition-specific products based on scientific research may positively affect our operating performance if we can
timely develop and offer such condition specific products;
the effects of favorable and unfavorable publicity on consumer demand with respect to the products we offer or the ingredients they contain or
any similar products distributed by other companies may have similarly favorable or unfavorable effects on our operating performance;
a lack of long-term experience with human consumption of ingredients in some of our products could create uncertainties with respect to the
health risks, if any, related to the consumption of such ingredients and negatively affect our operating performance;
increased costs associated with complying with new and existing governmental regulation and product recalls may negatively affect our
operating performance; and
a decline in disposable income available to consumers may lead to a reduction in consumer spending and negatively affect our operating
performance.
Results of Operations
The following information presented as of December 31, 2011, 2010 and 2009 and for the years then ended was derived from our audited consolidated
financial statements and accompanying notes.
As discussed in Note 16, "Segments," to our audited consolidated financial statements, we evaluate segment operating results based on several indicators.
The primary key performance indicators are revenues and operating income for each segment. Revenues and operating income or loss, as evaluated by
management, exclude certain items that are managed at the consolidated level, such as warehousing and transportation costs, impairments and other corporate
costs. The following discussion compares the revenues and the operating income by segment, as well as those items excluded from the segment totals.
Same store sales growth reflects the percentage change in same store sales in the period presented compared to the prior year period. Same store sales are
calculated on a daily basis for each store and exclude the net sales of a store for any period if the store was not open during the same period of the prior year.
We also include our internet sales, as generated through GNC.com, LuckyVitamin.com and www.drugstore.com, in our company-owned domestic same store
sales calculation. When a store's square footage has been changed as a result of reconfiguration or relocation in the same mall or shopping center, the store
continues to be treated as a same store. If, during the period presented, a store was closed, relocated to a different mall or shopping center, or converted to a
franchise store or a company-owned store, sales from that store up to and including the closing day or the day immediately preceding the relocation or
conversion are included as same store sales as long as the store was open during the same period of the prior year. We exclude from the calculation sales
during the period presented that occurred on or after the date of relocation to a different mall or shopping center or the date of a conversion.
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