Herbalife Earnings: Third Straight Quarter of Net Income Growth

Herbalife Ltd. (NASDAQ:HLF) reported net income above Wall Street’s expectations for the first quarter. Herbalife, Ltd is the marketing company that sells weight management, nutritional supplement, energy, sports and fitness products and personal care products.

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Herbalife Earnings Cheat Sheet for the First Quarter

Results: Net income for the drug company rose to $87.6 million ($1.41/share) vs. $51.9 million (83 cents/share) in the same quarter a year earlier. A rise of 68.8% from the year earlier quarter.

Revenue: Rose 28.5% to $795.1 million YoY.

Actual vs. Wall St. Expectations: HLF reported adjusted net income of of $1.43/share. By that measure, the company beat the mean estimate of $1.21/share. Estimates ranged from $1.19 per share to $1.22 per share.

Quoting Management: “Our ongoing efforts to globalize daily consumption-based distributor methods of operation (DMOs) continued to provide strong growth to both the top and bottom line growth in the first quarter,” said Michael O. Johnson, the company’s chairman and CEO. “The company’s strategic focus to provide solutions for two large mega trends, the global obesity epidemic and the desire for people to earn more income, continues to provide a large platform for us to succeed. The company will continue to invest to support our growth with such initiatives as the Seed to Feed verticalization strategy.”

Key Stats:

The company has enjoyed double-digit year-over-year revenue growth for the past five quarters. Over that span, the company has averaged growth of 19.9%, with the biggest boost coming in the most recent quarter when revenue rose 28.5% from the year earlier quarter.

The company has now seen net income rise in three-straight quarters. In the fourth quarter of the last fiscal year, net income rose 45.5% and in the third quarter of the last fiscal year, the figure rose 30.8%.

Gross margins grew 2.2 percentage points to 79.5%. The growth seemed to be driven by increased revenue, as the figure rose 28.5% from the year earlier quarter while costs rose 15.9%.

Competitors to Watch: Herbalife Ltd. (HOO), Nu Skin Enterprises, Inc. (NYSE:NUS), USANA Health Sciences, Inc. (NASDAQ:USNA), Avon Products, Inc. (NYSE:AVP), Nature’s Sunshine Prod. (NASDAQ:NATR), The Estee Lauder Companies Inc. (NYSE:EL), Natural Health Trends Corp. (NHTC), Alberto-Culver Company (NYSE:ACV), Mannatech, Inc. (NASDAQ:MTEX), and Reliv International, Inc (NASDAQ:RELV)

Stock Performance: Shares of HLF are up over 8% in after hours trading.

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