Herbalife Ltd. (NYSE:HLF) reported fourth quarter net sales of $1.1 billion. Net sales, excluding currency impact, grew by 9.7%, while reported net sales declined 3.1% primarily due to the continuing unfavorable impact of currency exchange rates. Adjusted1 earnings for the quarter were $1.19 per diluted share compared to $1.41 per diluted share for the same period in 2014. On a reported basis, fourth quarter net income was $84.5 million, or $0.98 per diluted share, compared to $103.3 million, or $1.21 per diluted share for the same period in 2014. Fourth quarter 2015 net income and diluted EPS were negatively impacted by$26.0 million2 and $0.302 per diluted share respectively, due to currency fluctuations.
For the quarter ended December 31, 2015, the company generated $135.5 million in net operating cash flow, and invested $30.4 million in capital expenditures.
For the year ended December 31, 2015, the company reported net sales of $4.5 billion, a 9.9% decrease compared to 2014, primarily due to the continuing unfavorable impact of currency exchange rates. Local currency net sales increased 4.7%, compared to 2014. Adjusted1 earnings for the year were $5.00 per diluted share compared to $5.93 per diluted share for the full year 2014. On a reported basis, full year net income grew 9.8% to $339 million, or $3.97 per diluted share, compared to $309 million, or $3.40 per diluted share for full year 2014. Full year 2015 net income and diluted EPS were negatively impacted $137.8 million3 or $1.573 per diluted share respectively, due to currency fluctuations.
For the year ended December 31, 2015, the company generated cash flow from operations of $628.7 million and invested $79.1 million in capital expenditures.
For the full year 2016, the company is updating its adjusted EPS guidance, solely to reflect current FX rates, to a range of $4.05 to $4.50 per diluted share, from the previous range of $4.35 to $4.75 per diluted share. Guidance includes a currency headwind of approximately $0.80 per diluted share, compared to 2015, which includes an additional $0.30 negative impact from currency compared to initial guidance provided a quarter ago. Full year 2016 currency adjusted EPS guidance is in a range of$4.85 to $5.30.
Michael O. Johnson, chairman and CEO, Herbalife, stated, “2015 was a significant year for Herbalife, as we completed the rollout of bold and important changes to the marketing plan that will enhance the long-term and sustainable growth of our business. We successfully navigated the associated short-term challenges, believing that we were making the right changes at the right time, and despite ongoing currency and macroeconomic challenges, we finished the year returning to growth.”
Johnson continued, “Across the globe, we see more and more health-conscious consumers looking to take their nutrition and health more seriously. We believe Herbalife is well positioned to meet these consumers’ needs through our extensive product range and the personalized approach of our members.”
Guidance for the first quarter 2016 includes an unfavorable impact from currency exchange rates of approximately $0.27 per diluted share versus the first quarter of 2015.
Full year 2016 guidance includes a currency headwind of approximately $0.80 per diluted share, compared to 2015, which includes an additional $0.30 negative impact from currency compared to initial guidance provided a quarter ago.
Full year 2016 volume point guidance remains unchanged from previous guidance on an absolute value basis, which translates to a growth rate in the expected range 1.5% to 4.5% compared to 2015. (Original Source)
Shares of Herbalife are down nearly 2% in after-hours trading. HLF has a 1-year high of $61.95 and a 1-year low of $30.27. The stock’s 50-day moving average is $46.94 and its 200-day moving average is $53.71.
On the ratings front, Herbalife has been the subject of a number of recent research reports. In a report issued on November 4, Pivotal Research analyst Timothy Ramey maintained a Buy rating on HLF, with a price target of $85, which implies an upside of 84.4% from current levels. Separately, on the same day, Canaccord Genuity’s Scott Van Winkle maintained a Buy rating on the stock and has a price target of $61.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Timothy Ramey and Scott Van Winkle have a total average return of 3.9% and -3.0% respectively. Ramey has a success rate of 57.1% and is ranked #722 out of 3666 analysts, while Winkle has a success rate of 39.0% and is ranked #3137.
Herbalife Ltd is a nutrition company. The Company along with its subsidiaries sells weight management, targeted nutrition, energy, sports & fitness, and outer nutrition products.