Herbalife Disappoints in 3Q17, Stock Falls
HLF stock fell 3.9% in after-hours trading
Herbalife (HLF) stock reported sluggish 3Q17 results, and then the stock fell 3.9% in after-hours trading. The company’s sales and profitability fell on a YoY (year-over-year) basis and missed the consensus estimates. The continued decline in volume points in key markets, including North America, China (FXI), and Mexico, remained a drag.
Lower volume points, increased costs, higher spending on promotional events, and increased interest costs dented the company’s bottom-line results. A higher adjusted effective tax rate further pressured the company’s EPS (earnings per share) in 3Q17.
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Going forward, a weakness in the United States (SPY) and challenging market trends in China, Mexico, and Central America could restrict the company’s top-line growth. Pressures on costs from adverse currency movements are also expected to remain a drag.
Herbalife is focusing on new product launches, self-manufacturing, and strategic sourcing to drive sales and reduce costs. However, softness across several regions is expected to remain a drag.
Herbalife stock remained strong throughout the year and has risen 46.4% on a YTD (year-to-date) basis. Nu Skin Enterprises (NUS) and Usana Health Sciences (USNA) have risen 27.4% and 15.6%, respectively, YTD. Vitamin Shoppe (VSI) stock has fallen steeply since the beginning of the year.
The S&P 500 Index (SPX-INDEX) has risen 15.2% during the same period.