Herbalife Nutrition Ltd. (HLF - Free Report) revealed Michael O. Johnson’s immediate appointment as an interim CEO, after Richard Goudis’ (current CEO) exit. Well, shares of the company lost 2.4% during yesterday’s after-hours trading session, following the news.
Management stated that Goudis’ resignation is not a result of any problems related to Herbalife’s results. However, certain remarks passed by Goudis’ before he assumed the CEO’s role, recently came into focus and the comments were conflicting with Herbalife’s business practices and cost strategies. In fact, the comments were not at all in line with the company’s position and culture, which was possibly the reason behind his resignation.
As for Johnson, he served the company as a CEO from 2003 to 2017, and is currently the Executive Chairman. As an interim CEO, Johnson will supervise Herbalife’s operations together with the other senior personnel. He will also remain committed toward boosting Herbalife’s performance, and helping the company retain its robust growth record.
In fact, concurrently, the company also unveiled its preliminary volume point outcome for the fourth quarter of 2018. Per the preliminary results, worldwide volume points rallied 11.6% year over year. On adjusting for various products in Mexico, North America, and South & Central America, worldwide volumes would showcase a rise of 10.8%.
Management also reiterated its previously issued outlook for 2019, which itself is a reflection of the company’s superb past record and confidence in future prospects. Adjusted earnings for 2018 are envisioned to be $2.74-$2.84 per share.
Talking of the solid past record, in third-quarter 2018, Herbalife’s top and bottom lines improved year over year and topped the Zacks Consensus Estimate for the fourth consecutive time. Earnings, which surged 80.5% year on year in the quarter, were driven by robust sales and improved gross margin. Further, the top line advanced nearly 14.5% year over year, backed by sales growth in five out of six regions. Moreover, the quarterly results benefited from strong volume point advancement.
Markedly, the solid past record and an encouraging outlook have helped shares of this Zacks Rank #3 (Hold) company rally a whopping 69.5% in the past year, against the industry’s decline of 5.6%. We believe that Johnson’s efficacy and dedicated endeavors will help Herbalife sustain its splendid run.
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