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Herbalife Ltd. (HLF - Free Report) informed that 90% of the U.S. sales were documented purchases by consumers in May, which consisted of over three million receipted retail transactions because of its distributors’ commitment. Further, management said it outpaced the key threshold of 80% under its agreement with the U.S. Federal Trade Commission.
Notably, Herbalife recognizes its distributors’ significant efforts and informed that roughly 400,000 customers have converted or signed up as preferred members in the U.S. since Oct 2016.
As a result, the company raised its earnings guidance for the second quarter and full-year 2017. Herbalife now expects its adjusted earnings in the band of 95 cents–$1.15 for the second quarter that ends on Jun 30. Earlier, it had projected the same in the range of 85 cents–$1.05 and delivered $1.29 in the year-ago quarter. The Zacks Consensus Estimate is currently pegged within the company’s guided range at $1.00. In addition, management anticipates earnings per share in the range of 75–95 cents for the quarter versus 65–85 cents guided earlier.
For 2017, Herbalife estimates its adjusted earnings in the band of $4.10–$4.50 per share versus $4.05–$4.45 guided previously. However, the company delivered posted adjusted earnings of $4.85 in 2016. The Zacks Consensus Estimate is currently pegged at the higher end of the current guided range. Moreover, management anticipates earnings per share for the full year in the range of $3.30–$3.70 compared with the previously guided range of $3.25–$3.65.
However, the company expects sales decline to widen in the range of 2–6% from 0.5–4.5%. Also, volumes are expected to decrease 4–8% compared with previous range of 1–5% for the second quarter.
The company expects net sales in 2017 to increase nearly 0.5–3.5% versus 3–6% anticipated earlier. Volumes are projected to be down 1% to up 2% compared with previous guided range of 2–5% growth.
Herbalife issued soft sales guidance for both the second quarter and 2017, due to the new FTC rules in the U.S., softness in its Mexico operations and distributors adopting the latest protocols. Nevertheless, the company believes that its sales will be impacted only for a short time span, which will be followed by a sequential improvement.
Recently, the company posted better-than-expected first-quarter 2017 results. In fact, Herbalife’s earnings have outpaced the Zacks Consensus Estimate for 10 straight quarters now, with a trailing four-quarter average of 18.4%. Also, its shares have outperformed both the Zacks categorized Retail–Drug Stores industry and the broader sector year to date. This Zacks Rank #1 (Strong Buy) stock surged 53.6% against the industry’s decline of 1.5%. The industry is currently placed at top 16% of the Zacks Classified industries (40 out of 256). Meanwhile, the Zacks categorized Retail-Wholesale sector gained 15.5%.
Stocks You May Consider
Some other favorably placed stocks worth considering in the broader Retail-Wholesale sector include The Children's Place, Inc. (PLCE - Free Report) , Best Buy Co., Inc. (BBY - Free Report) and J.Jill, Inc. (JILL - Free Report) .
The Children's Place, with a long-term earnings growth rate of 8%, has posted an average earnings beat of 36.6% in the past four quarters. The stock currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Best Buy, a Zacks Rank #1 stock has a long-term earnings growth rate of 11.8%. Also, it has posted an average earnings beat of 33.8% in the last four quarters.
J.Jill carries a Zacks Rank #2 (Buy) and has a long-term earnings growth rate of 19.8%.
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Herbalife (HLF) Exceeds FTC Threshold, Updates Guidance
Herbalife Ltd. (HLF - Free Report) informed that 90% of the U.S. sales were documented purchases by consumers in May, which consisted of over three million receipted retail transactions because of its distributors’ commitment. Further, management said it outpaced the key threshold of 80% under its agreement with the U.S. Federal Trade Commission.
Notably, Herbalife recognizes its distributors’ significant efforts and informed that roughly 400,000 customers have converted or signed up as preferred members in the U.S. since Oct 2016.
As a result, the company raised its earnings guidance for the second quarter and full-year 2017. Herbalife now expects its adjusted earnings in the band of 95 cents–$1.15 for the second quarter that ends on Jun 30. Earlier, it had projected the same in the range of 85 cents–$1.05 and delivered $1.29 in the year-ago quarter. The Zacks Consensus Estimate is currently pegged within the company’s guided range at $1.00. In addition, management anticipates earnings per share in the range of 75–95 cents for the quarter versus 65–85 cents guided earlier.
For 2017, Herbalife estimates its adjusted earnings in the band of $4.10–$4.50 per share versus $4.05–$4.45 guided previously. However, the company delivered posted adjusted earnings of $4.85 in 2016. The Zacks Consensus Estimate is currently pegged at the higher end of the current guided range. Moreover, management anticipates earnings per share for the full year in the range of $3.30–$3.70 compared with the previously guided range of $3.25–$3.65.
However, the company expects sales decline to widen in the range of 2–6% from 0.5–4.5%. Also, volumes are expected to decrease 4–8% compared with previous range of 1–5% for the second quarter.
The company expects net sales in 2017 to increase nearly 0.5–3.5% versus 3–6% anticipated earlier. Volumes are projected to be down 1% to up 2% compared with previous guided range of 2–5% growth.
Herbalife issued soft sales guidance for both the second quarter and 2017, due to the new FTC rules in the U.S., softness in its Mexico operations and distributors adopting the latest protocols. Nevertheless, the company believes that its sales will be impacted only for a short time span, which will be followed by a sequential improvement.
Recently, the company posted better-than-expected first-quarter 2017 results. In fact, Herbalife’s earnings have outpaced the Zacks Consensus Estimate for 10 straight quarters now, with a trailing four-quarter average of 18.4%. Also, its shares have outperformed both the Zacks categorized Retail–Drug Stores industry and the broader sector year to date. This Zacks Rank #1 (Strong Buy) stock surged 53.6% against the industry’s decline of 1.5%. The industry is currently placed at top 16% of the Zacks Classified industries (40 out of 256). Meanwhile, the Zacks categorized Retail-Wholesale sector gained 15.5%.
Stocks You May Consider
Some other favorably placed stocks worth considering in the broader Retail-Wholesale sector include The Children's Place, Inc. (PLCE - Free Report) , Best Buy Co., Inc. (BBY - Free Report) and J.Jill, Inc. (JILL - Free Report) .
The Children's Place, with a long-term earnings growth rate of 8%, has posted an average earnings beat of 36.6% in the past four quarters. The stock currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Best Buy, a Zacks Rank #1 stock has a long-term earnings growth rate of 11.8%. Also, it has posted an average earnings beat of 33.8% in the last four quarters.
J.Jill carries a Zacks Rank #2 (Buy) and has a long-term earnings growth rate of 19.8%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>