Herbalife Ltd. Smashes Earnings Estimates

herbalifeBy Herbalife International of America, Inc. (http://www.herbalife.com) [CC BY-SA 4.0], via Wikimedia Commons

Herbalife Ltd. (NYSE:HLF) released its latest earnings report after closing bell tonight, posting adjusted earnings of $1.36 per share on sales of $1.1 billion. Wall Street was expecting adjusted earnings of $1.07 per share on $1.07 billion in sales. Management had guided for adjusted earnings to be between 97 cents and $1.07 per share for the quarter. In last year’s first quarter, the controversial company posted $1.29 per share in adjusted earnings.

Herbalife posts strong growth

Herbalife said total worldwide volume points increased 4.5%, beating guidance, with more than 20 markets posting record quarterly growth. Net sales increased 10.9% in constant currencies, while reported earnings increased 21.7% to $1.12 per share, compared to 92 cents per share in the same quarter a year ago.

“We’ve started the year by exceeding EPS guidance on both the top and bottom line and by returning to reported net sales growth, year over year, the first time in 5 quarters,” said Herbalife Chairman and CEO Michael O. Johnson in a statement. “Our updated guidance reflects the confidence that we have for the remainder of the year as we continue to hold the line on expenses while investing prudently towards the future.”

Management also updated their full-year guidance. They now expect 2% to 5% growth in worldwide volume points and about 70 cents per share in currency headwinds for the year. They also raised their guidance for adjusted earnings to between $4.40 and $4.75 per share and net sales to be between 1.5% and 4.5% growth.

Herbalife expects to pay in FTC probe

Herbalife also said tonight that their negotiations with the FTC had entered “advanced” stages and that now litigation or settlement are included in the possible outcomes. The controversial company said if a settlement is reached, it could pay about $200 million.

Pivotal Research analyst Tim Ramey had said before tonight’s print that he expects the Federal Trade Commission to wrap up its investigation of the company very soon, although he’s been saying this for quite a long time. He continues to expect that the outcome will be favorable to the company and that the Securities and Exchange Commission’s investigation will close with the FTC case.

Currencies have been plaguing Herbalife and every other U.S.-based company with high volumes of international sales for a long time now, and Ramey had said before tonight’s report that he expects this headwind to abate as the year goes on.

Herbalife shares surged in after-hours trades, climbing by more than 11% to as high as $64.70

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About the Author

Michelle Jones
Michelle Jones was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Michelle has been with ValueWalk since 2012 and is now our editor-in-chief. Email her at [email protected]

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