We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Herbalife (HLF) Q4 Earnings & Sales Top Estimates, Grow Y/Y
Read MoreHide Full Article
Herbalife Ltd. (HLF - Free Report) delivered fourth-quarter 2017 results, wherein both top and bottom lines increased year over year and topped estimates. Further, management reiterated 2018 outlook, alongside issuing a drab view for the first quarter.
Nevertheless, this Zacks Rank #3 (Hold) company has surged 40% in a year, courtesy of its impressive earnings surprise history. Further, Herbalife’s stock price performance was better than the industry, which declined 17.4% in the same period.
Quarter in Detail
Adjusted earnings of $1.29 per share came ahead of the Zacks Consensus Estimate of 96 cents, and surged 29% year over year. Also, the quarterly figure came ahead of the company’s guided range. On a GAAP basis, the company reported a loss of 87 cents per share, as against earnings of $1.16 in the year-ago period. The company’s GAAP figure for this quarter includes a one-time charge of nearly $2.01 per share related to the tax reform act.
Despite a slip in volume points, net sales of $1,093.3 million advanced 4.6% year over year. Sales also surpassed the Zacks Consensus Estimate of $1,089 million. On a constant currency basis, sales grew 3.4%. Notably, this marked the company’s first year-over-year top-line increase, after four successive declines.
Volume points slid 1.8% to 1.3 billion, in line with management’s recently updated guidance. Regionally, volumes in Europe, the Middle East and Africa (EMEA), China and Asia Pacific rose 4.5%, 9.6% and 0.2% respectively. Notably, trends reversed in China following two consecutive quarters of volume declines.
Sales volumes in all other regions fell, with North America suffering the maximum plunge of 7.3%. However, this marked a significant improvement on a sequential basis, courtesy of the company’s efforts to keep pace with the evolving consumer trends. Also, management remains hopeful of the trends to improve even further once the changes made in May 2017 annualize. Volumes at Mexico tumbled 8.4%, while South & Central America witnessed volume a decline of 6.6%.
Gross margin contracted about 40 bps to 80.8% due to currency headwinds, somewhat compensated by improved pricing.
Other Financial Updates
Herbalife ended the quarter with cash and cash equivalents of $1,278.8 million, long-term debt (net of current portion) of $2,165.7 million and total shareholders’ deficit $334.7 million.
During 2017, the company generated cash flow from operations of $590.8 million and incurred capital expenditure of $95.5 million.
Since the inception of the February 2017 buyback program, the company bought back nearly 11.7 million shares — including buybacks of 400,000 shares made from Nov 2, 2017 to Feb 21, 2018.
Other Developments
Concurrently, Herbalife unveiled a new executive organization structure that will take effect from May 1, 2018. As part of the new structure, the company’s current president — Des Walsh will be transitioned to assume the new role of executive vice chairman. Alongside, two veterans from the company will be promoted to the role of co-president. Apart from this, the company announced various other changes, with the aim of developing the business and fueling strategic growth.
Outlook
The company remains on track with its strategic plans for 2018. In this regard, it is focused on utilizing its solid technology structure and making advancements in the digital space. This is well-reflected by its recently inked deal with Salesforce, which is likely to bring various CRM capacities to Herbalife’s distributors and customers. Moreover, the company remains focused on undertaking innovations, per the changing needs of customers. Incidentally, Herbalife launched more than 70 products globally during the fourth quarter, including some noteworthy ones in the top markets.
That said, management reiterated outlook for 2018, wherein it anticipates net sales to advance 5.5-9.5%, whereas volumes are expected to rise 2-6%. Further, management expects the bottom line to come in a band of $4.60 to $5.00 per share, much lower than the current Zacks Consensus Estimate of $5.40.
This guidance includes repurchases of about $200 million expected for 2018. Capital expenditure is still envisioned in a band of $115 million to $155 million.
Q1
For first-quarter 2018, Herbalife expects net sales growth in a range of negative 1% to 3% rise, while volumes are expected to fall in a range of 7-3%. Sales growth is likely to benefit from foreign currency fluctuations to the tune of about 350 bps. Management expects the first quarter to bear the brunt of tough year-over-year comparisons in North America and China.
Additionally, the company expects adjusted earnings per share to range from 90 cents to $1.10. The consensus mark is pegged at $1.24. Capital expenditure is envisioned in a band of $30 million to $40 million for the first quarter.
Effective tax rate for the first quarter and 2018 is likely to range 30-35%, while on an adjusted basis the same is expected to be 27-32%.
Foot Locker (FL - Free Report) , with a Zacks Rank #2 (Buy), has witnessed positive estimate revisions over the past seven days.
Children's Place (PLCE - Free Report) with a Zacks Rank #2, has a splendid earnings surprise history and a long-term earnings growth rate of 9%.
Zacks Top 10 Stocks for 2018
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2018?
Last year's 2017 Zacks Top 10 Stocks portfolio produced double-digit winners, including FMC Corp. and VMware which racked up stellar gains of +67.9% and +61%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Image: Bigstock
Herbalife (HLF) Q4 Earnings & Sales Top Estimates, Grow Y/Y
Herbalife Ltd. (HLF - Free Report) delivered fourth-quarter 2017 results, wherein both top and bottom lines increased year over year and topped estimates. Further, management reiterated 2018 outlook, alongside issuing a drab view for the first quarter.
Nevertheless, this Zacks Rank #3 (Hold) company has surged 40% in a year, courtesy of its impressive earnings surprise history. Further, Herbalife’s stock price performance was better than the industry, which declined 17.4% in the same period.
Quarter in Detail
Adjusted earnings of $1.29 per share came ahead of the Zacks Consensus Estimate of 96 cents, and surged 29% year over year. Also, the quarterly figure came ahead of the company’s guided range. On a GAAP basis, the company reported a loss of 87 cents per share, as against earnings of $1.16 in the year-ago period. The company’s GAAP figure for this quarter includes a one-time charge of nearly $2.01 per share related to the tax reform act.
Herbalife LTD. Price, Consensus and EPS Surprise
Herbalife LTD. Price, Consensus and EPS Surprise | Herbalife LTD. Quote
Despite a slip in volume points, net sales of $1,093.3 million advanced 4.6% year over year. Sales also surpassed the Zacks Consensus Estimate of $1,089 million. On a constant currency basis, sales grew 3.4%. Notably, this marked the company’s first year-over-year top-line increase, after four successive declines.
Volume points slid 1.8% to 1.3 billion, in line with management’s recently updated guidance. Regionally, volumes in Europe, the Middle East and Africa (EMEA), China and Asia Pacific rose 4.5%, 9.6% and 0.2% respectively. Notably, trends reversed in China following two consecutive quarters of volume declines.
Sales volumes in all other regions fell, with North America suffering the maximum plunge of 7.3%. However, this marked a significant improvement on a sequential basis, courtesy of the company’s efforts to keep pace with the evolving consumer trends. Also, management remains hopeful of the trends to improve even further once the changes made in May 2017 annualize. Volumes at Mexico tumbled 8.4%, while South & Central America witnessed volume a decline of 6.6%.
Gross margin contracted about 40 bps to 80.8% due to currency headwinds, somewhat compensated by improved pricing.
Other Financial Updates
Herbalife ended the quarter with cash and cash equivalents of $1,278.8 million, long-term debt (net of current portion) of $2,165.7 million and total shareholders’ deficit $334.7 million.
During 2017, the company generated cash flow from operations of $590.8 million and incurred capital expenditure of $95.5 million.
Since the inception of the February 2017 buyback program, the company bought back nearly 11.7 million shares — including buybacks of 400,000 shares made from Nov 2, 2017 to Feb 21, 2018.
Other Developments
Concurrently, Herbalife unveiled a new executive organization structure that will take effect from May 1, 2018. As part of the new structure, the company’s current president — Des Walsh will be transitioned to assume the new role of executive vice chairman. Alongside, two veterans from the company will be promoted to the role of co-president. Apart from this, the company announced various other changes, with the aim of developing the business and fueling strategic growth.
Outlook
The company remains on track with its strategic plans for 2018. In this regard, it is focused on utilizing its solid technology structure and making advancements in the digital space. This is well-reflected by its recently inked deal with Salesforce, which is likely to bring various CRM capacities to Herbalife’s distributors and customers. Moreover, the company remains focused on undertaking innovations, per the changing needs of customers. Incidentally, Herbalife launched more than 70 products globally during the fourth quarter, including some noteworthy ones in the top markets.
That said, management reiterated outlook for 2018, wherein it anticipates net sales to advance 5.5-9.5%, whereas volumes are expected to rise 2-6%. Further, management expects the bottom line to come in a band of $4.60 to $5.00 per share, much lower than the current Zacks Consensus Estimate of $5.40.
This guidance includes repurchases of about $200 million expected for 2018. Capital expenditure is still envisioned in a band of $115 million to $155 million.
Q1
For first-quarter 2018, Herbalife expects net sales growth in a range of negative 1% to 3% rise, while volumes are expected to fall in a range of 7-3%. Sales growth is likely to benefit from foreign currency fluctuations to the tune of about 350 bps. Management expects the first quarter to bear the brunt of tough year-over-year comparisons in North America and China.
Additionally, the company expects adjusted earnings per share to range from 90 cents to $1.10. The consensus mark is pegged at $1.24. Capital expenditure is envisioned in a band of $30 million to $40 million for the first quarter.
Effective tax rate for the first quarter and 2018 is likely to range 30-35%, while on an adjusted basis the same is expected to be 27-32%.
3 Retail Stocks You Can’t Miss
Buckle (BKE - Free Report) has an impressive earnings surprise history. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Foot Locker (FL - Free Report) , with a Zacks Rank #2 (Buy), has witnessed positive estimate revisions over the past seven days.
Children's Place (PLCE - Free Report) with a Zacks Rank #2, has a splendid earnings surprise history and a long-term earnings growth rate of 9%.
Zacks Top 10 Stocks for 2018
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2018?
Last year's 2017 Zacks Top 10 Stocks portfolio produced double-digit winners, including FMC Corp. and VMware which racked up stellar gains of +67.9% and +61%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2018 today >>