Applied Nutrition‘s (LSE:APN) a FTSE 250 stock I’ve been watching for a while. Since listing in 2024, it’s done very well, doubling in the past year.

Let’s take a look at why I like this growth stock.

Times they are a-changin’

Back in the day, many young people socialised in bars, pubs and nightclubs. And underaged youths would often gather around shops on a weekend, drinking cheap bottles of booze.

However, as the Bob Dylan track says, the times they are a-changin’. On Good Friday night, my local gym was absolutely packed with youngsters. And judging by how long they were taking on the machines, they were spending as much time talking/socialising as working out!

Meanwhile, in the bustling fitness studio next door, dance tunes pumped out as people of all ages jumped, skipped, pushed, squatted, lunged and sweated (a lot). It sounded like a nightclub, but with PBs (personal bests) instead of G&Ts.

According to a recent McKinsey study, 84% and 79% of consumers in the US and UK respectively see wellness as a top or important priority. And many Gen Zers now view supplements as a necessity rather than a luxury.

Enter Applied Nutrition, a company that’s directly benefitting from this powerful fitness and wellness trend.

A high-growth brand

As health and wellness becomes increasingly embedded in everyday consumer behaviour, we continue to benefit from a larger pool of individuals embarking on, or continuing, their wellness journey. Our ranges are designed to cater to the needs of everyone on that journey.

Applied Nutrition.

The founder-led company sells protein, pre-workout drinks, vitamins, collagen, and various other supplements. It’s a trusted and innovative brand, which is why its products are sold globally, from Tesco and Walmart to Holland & Barrett and sports clubs.

In the six months to 31 January (H1), the firm’s revenue soared 56.5% to £74.5m, while adjusted pre-tax profit jumped 54% to £20.9m. And for the full year, revenue of £140m is expected, which would represent solid 31% growth.

Doing a lot of the heavy lifting was its whey protein products (Critical Whey). Sales in H1 were 128% ahead of the same period the year before. This proves that consumers really trust the Applied Nutrition brand, especially as there’s reportedly a lot of watered-down rubbish online.

Speaking personally, I would rather pay a few quid more to get proper creatine and protein. Its Critical Whey products are independently tested to assure customers of the protein content.

Another thing I like is that JD Sports Fashion is a significant shareholder. So inside 100+ JD Gyms, the vending machines have Applied Nutrition products, including its best-selling ABE (All Black Everything) energy drinks. This helps consumers find the latest products and flavours. 

Iran war risk

Now, one risk here is the Middle East conflict flaring up, which could see shipping routes blocked again. Management’s already expecting lower purchasing activity in the region, while surging whey protein prices aren’t welcome.

Despite these near-term risks, I’m bullish enough to start a position in April. The stock’s trading at a reasonable 18 times next year’s forecast earnings.

The global sports nutrition and wellness market’s projected to reach £279bn by 2028, growing at an annual compound rate of 8%. For good measure, Applied Nutrition is seeing strong growth in Spain, Germany and Latin America.