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Will Soft Volumes Hurt Herbalife (HLF) This Earnings Season?
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Herbalife Ltd. (HLF - Free Report) is slated to release first-quarter 2018 results on May 3. This provider of nutrition and weight management solutions has outperformed the Zacks Consensus Estimate by an average of 28.6% in the trailing four quarters. Let’s see what’s in store this time.
Factors Impacting the Quarter
Herbalife remains dedicated toward implementing new technologies and making advancements in the digital space. This is evident from 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 in order to align with the changing needs of customers. Incidentally, it launched more than 70 products globally during the fourth quarter. We believe that such efforts are likely to bear a positive impact the company’s performance in the first quarter of 2018.
Well, such endeavors to enhance performance, combined with an impressive earnings history have buoyed investor optimism on the stock. Evidently, the stock rallied 67.5% over the past year, in comparison with the industry’s decline of 17.8%.
However, Herbalife has been battling soft volumes due to stringent FTC regulations in the United States, which has been marring sales in the North American region. Further, volumes have been weak in the Mexico region, stemming from the impact of earthquakes in 2017. Owing to such headwinds, sales volumes in the North American and Mexico regions tumbled 7.3% and 8.4% respectively, during fourth-quarter 2017. As a result, overall, volume points slid 1.8% to 1.3 billion in the last reported quarter. Such adverse conditions are likely to persist in the aforementioned markets and consequently drag overall performance.
That said, lets now take a look at the picture unveiled by the Zacks Model as well as expectations for the upcoming quarterly announcement.
Which Way are Estimates Moving?
The company expects adjusted earnings per share to range from 90 cents to $1.10. The current Zacks Consensus Estimate for the quarter under review is pegged at $1.07, which shows a 13.7% decline from $1.24 recorded in the year-ago period. This estimate has remained stable in the last 30 days.
However, analysts polled by Zacks anticipate revenues to climb 1.6% year over year to $1,120 million. For first-quarter 2018, Herbalife expects net sales growth in a range of negative 1% to 3% rise.
Zacks Model
Our proven model doesn’t conclude that Herbalife is likely to beat bottom-line estimates this quarter. For this to happen, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Though Herbalife carries a Zacks Rank #3, its Earnings ESP of 0.00% makes surprise prediction difficult.
Stocks Poised to Beat Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Colgate (CL - Free Report) , a #3 Ranked company, has an Earnings ESP of +0.37%.
Estee Lauder (EL - Free Report) has an Earnings ESP of +0.67% and a Zacks Rank of 3.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Will Soft Volumes Hurt Herbalife (HLF) This Earnings Season?
Herbalife Ltd. (HLF - Free Report) is slated to release first-quarter 2018 results on May 3. This provider of nutrition and weight management solutions has outperformed the Zacks Consensus Estimate by an average of 28.6% in the trailing four quarters. Let’s see what’s in store this time.
Factors Impacting the Quarter
Herbalife remains dedicated toward implementing new technologies and making advancements in the digital space. This is evident from 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 in order to align with the changing needs of customers. Incidentally, it launched more than 70 products globally during the fourth quarter. We believe that such efforts are likely to bear a positive impact the company’s performance in the first quarter of 2018.
Well, such endeavors to enhance performance, combined with an impressive earnings history have buoyed investor optimism on the stock. Evidently, the stock rallied 67.5% over the past year, in comparison with the industry’s decline of 17.8%.
However, Herbalife has been battling soft volumes due to stringent FTC regulations in the United States, which has been marring sales in the North American region. Further, volumes have been weak in the Mexico region, stemming from the impact of earthquakes in 2017. Owing to such headwinds, sales volumes in the North American and Mexico regions tumbled 7.3% and 8.4% respectively, during fourth-quarter 2017. As a result, overall, volume points slid 1.8% to 1.3 billion in the last reported quarter. Such adverse conditions are likely to persist in the aforementioned markets and consequently drag overall performance.
That said, lets now take a look at the picture unveiled by the Zacks Model as well as expectations for the upcoming quarterly announcement.
Which Way are Estimates Moving?
The company expects adjusted earnings per share to range from 90 cents to $1.10. The current Zacks Consensus Estimate for the quarter under review is pegged at $1.07, which shows a 13.7% decline from $1.24 recorded in the year-ago period. This estimate has remained stable in the last 30 days.
Herbalife LTD. Price, Consensus and EPS Surprise
Herbalife LTD. Price, Consensus and EPS Surprise | Herbalife LTD. Quote
However, analysts polled by Zacks anticipate revenues to climb 1.6% year over year to $1,120 million. For first-quarter 2018, Herbalife expects net sales growth in a range of negative 1% to 3% rise.
Zacks Model
Our proven model doesn’t conclude that Herbalife is likely to beat bottom-line estimates this quarter. For this to happen, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Though Herbalife carries a Zacks Rank #3, its Earnings ESP of 0.00% makes surprise prediction difficult.
Stocks Poised to Beat Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Under Armour (UAA - Free Report) a Zacks #3 Ranked stock, has an Earnings ESP of +11.31%. You can see the complete list of today’s Zacks #1 Rank stocks here
Colgate (CL - Free Report) , a #3 Ranked company, has an Earnings ESP of +0.37%.
Estee Lauder (EL - Free Report) has an Earnings ESP of +0.67% and a Zacks Rank of 3.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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