Herbalife Swings to Loss but Boosts Outlook
04 August 2016 - 8:30AM
Dow Jones News
Herbalife Inc. swung to second-quarter loss, hurt by a
settlement with the Federal Trade Commission, but earnings
excluding items were above the company's projections.
Herbalife also increased its full-year adjusted earnings
guidance again.
Shares rose 2.6% to $68.80 in after-hours trading.
Last month, Herbalife agreed to pay $200 million in a settlement
that requires significant changes to its business practices but
allows the nutritional-products company to avoid being classified
as a pyramid scheme.
This was a victory for Herbalife in its long-running battle with
activist investor William Ackman, who has called Herbalife a
"criminal enterprise."
However, the FTC harshly criticized Herbalife's operations and
said the company will need to improve disclosures about its
distributors and sales.
Herbalife projects full-year earnings excluding items of $4.50
to $4.80 a share, up from May guidance of $4.40 to $4.75. It
reaffirmed its outlook for sales growth of 1.5% to 4.5%.
For the third quarter, it expects earnings excluding items of 98
cents to $1.08 a share.
Over all, Herbalife reported a loss of $22.9 million, or 28
cents a share, compared with net income of $82.8 million, or 97
cents a share, a year earlier. Earnings excluding items to rose to
$1.29 a share from $1.24.
Sales rose 3.4% to $1.2 billion. Excluding the impact of
currency, sales grew 10%.
Herbalife had projected earnings excluding items of $1.10 to
$1.20 a share and sales growth of up to 3%.
Write to Josh Beckerman at josh.beckerman@wsj.com
(END) Dow Jones Newswires
August 03, 2016 18:15 ET (22:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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