Herbalife Earnings Miss Estimates for First Time in 22 Quarters

Companies and Brands

Published: July 28, 2014 5:01 pm

Last Updated: April 27, 2020 10:52 pm

Herbalife Ltd. (NYSE: HLF) reported second-quarter 2014 results after the markets closed Monday. The nutrition and weight loss company posted adjusted diluted earnings per share (EPS) of $1.55 on revenues of $1.31 billion. In the same period a year ago, Herbalife reported EPS of $1.41 on revenues of $1.22 billion. The Thomson Reuters estimates called for EPS of $1.57 and $1.36 billion in revenue. The last time the company missed a quarterly EPS estimate was Q4 of 2008.

Since December 2012 when hedge fund manager Bill Ackman first charged Herbalife with being a pyramid scheme the company has beaten back every challenge from Ackman or anyone else and the stock is up more than 150%. The Federal Trade Commission (FTC) launched an investigation into the company’s multi-level marketing practices in the first quarter and other states and federal agencies have begun their own investigations. Ackman’s most recent challenge, fired last week, failed to re-ignite his campaign against the company.

Herbalife guided third quarter EPS to a range of $1.49 to $1.53 and full-year EPS to a range of $6.17 to $6.32. Consensus estimates call for third-quarter EPS of $1.62 and full-year EPS of $6.30. At the end of last quarter Herbalife raised its full-year guidance to a range of %6.10 to $6.30.

The company repurchased 9.8 million shares of common stock during the second quarter at an average price of $59.41 per share. The company has $232.9 million left in its currently authorized buyback program after purchasing more shares in the second quarter than it had originally said it would buy back.

The company’s CEO said:

Our performance is a testament to the enthusiasm our millions of consumers and members have for our products. Additionally, our independent members are successfully executing numerous growth strategies to further develop customer loyalty and encourage individuals across our network to lead healthier, nutritious lives.

Herbalife shares closed at $67.48 today in a 52-week trading range of $49.35 to $83.51. Shares are down nearly 10% in after-hours trading at $60.92. Thomson Reuters had a consensus analyst price target of $85.50 before today’s report.

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