Herbalife (HLF) fell by 2.5% and closed at $57.50 per share at the end of the fourth week of June 2016. The stock’s weekly, monthly, and YTD (year-to-date) price movements were -2.5%, -5.3%, and 7.2%, respectively. This means that Herbalife is trading 4.4% below its 20-day moving average, 4.1% below its 50-day moving average, and 3.2% above its 200-day moving average.
Related ETF and peers
The PowerShares Dynamic Market Portfolio ETF (PWC) invests 0.43% of its holdings in Herbalife. PWC tracks a quant-selected, tier-weighted index covering the entire US equity market. PWC’s YTD price movement was -3.3% on June 24, 2016.
The market caps of Herbalife’s competitors are as follows:
Herbalife launched its new drink
Herbalife launched its new sports drink, CR7 Drive, in partnership with global soccer star Cristiano Ronaldo. It’s part of the Herbalife24 sports nutrition range. It optimizes sports performance and fulfills the nutritional needs of fitness enthusiasts and professional athletes.
Performance in 1Q16
Herbalife reported fiscal 1Q16 net sales of $1.12 billion—a rise of 1.3% compared to net sales of $1.10 billion in fiscal 4Q15. The company’s gross profit margin and operating income rose by 0.50% and 24.1%, respectively, in fiscal 1Q16—compared to fiscal 1Q15.
Its net income and EPS (earnings per share) rose to $95.8 million and $1.12, respectively, in fiscal 1Q16—compared to $78.2 million and $0.92, respectively, in fiscal 4Q15.
Herbalife’s cash and cash equivalents fell by 13.0% and its inventories rose by 1.4% in fiscal 1Q16—compared to fiscal 4Q15. Its current ratio fell to 1.2x in fiscal 1Q16—compared to 1.5x in fiscal 4Q15.
Herbalife made the following projections for fiscal 2Q16:
- volume point growth of 1.5%–4.5%
- net sales growth of 0.0%–3.0%
- adjusted EPS of $1.10–$1.20
- capital expenditure of $65.0 million–$75.0 million
- currency adjusted net sales growth of 5.5%–8.5%
- currency adjusted EPS of $1.30–$1.40
The company made the following projections for fiscal 2016:
- volume point growth of 2.0%–5.0%
- net sales growth of 1.5%–4.5%
- adjusted EPS of $4.40–$4.75
- capital expenditure of $145.0 million–$175.0 million
- effective tax rate of 28.0%–30.0%
- currency adjusted net sales growth of 6.0%–9.0%
- currency adjusted EPS of $5.10–$5.45
The guidance for currency-adjusted net sales growth and EPS excludes the impact of price increases in its Venezuela operations tied to foreign exchange movements.
In the next part of this series, we’ll look at Avon Products.