Herbalife Ltd.'s (HLF) second-quarter profit rose 8.5% as the
nutritional-supplements maker recorded double-digit sales
growth
Shares jumped 5.7% to $65.05 after hours as results topped
Herbalife's expectations and the company lifted its full-year
guidance. Through the close, the stock has climbed 84% since the
start of the year.
The company now sees full-year earnings of $4.83 to $4.95 a
share and sales growth of 16% to 18%. Its prior outlook was for
earnings between $4.60 and $4.80 a share and sales growth of 13% to
15%.
For the third quarter, Herbalife forecast per-share earnings of
$1.09 to $1.13 and sales growth of 16.5% to 18.5%. Analysts polled
by Thomson Reuters most recently projected $1.16 and 13%,
respectively.
Herbalife sells a range of products, including weight-loss
shakes and fitness supplements, operating through a wide global
network of independent distributors. The company has been embroiled
in a public battle with Pershing Square Capital Management LP's
William Ackman, who has accused the company of being a pyramid
scheme and made a big bet that the stock would fall. Herbalife has
vigorously rebutted the allegations and accused Mr. Ackman of
trying to manipulate its stock, a charge he has denied. The battle
has also inspired some high-profile defenders, with hedge-fund
managers Carl Icahn and Daniel Loeb disclosing that they have gone
long on the stock. In April, shareholders voted to elect two board
nominees backed by Mr. Icahn.
For the latest period, Herbalife reported a profit of $143.2
million, or $1.34 a share, up from $132 million, or $1.09 a share,
a year earlier. Excluding the impact of the devaluation of
Venezuelan currency, expenses incurred responding to attacks on the
company's business model and expenses related to the re-audit of
prior financial statements due to the resignation of KPMG LLP as
its auditor, adjusted earnings were $1.41 a share in the latest
period. Sales climbed 18% to $1.22 billion.
In April, Herbalife projected earnings of $1.14 to $1.18 a share
and sales growth of 11% to 13%.
Gross margin narrowed to 79.7% from 80.3%.
Write to Nathalie Tadena at nathalie.tadena@wsj.com
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