Full Press Release Details
Exceeds First Quarter 2017 Reported and Adjusted EPS Guidance
quarter 2017 reported diluted EPS of $0.98 and adjusted1
diluted EPS of $1.24, which both include a $0.10 negative impact due
to currency fluctuations
quarter 2017 reported net sales of $1.1 billion
point growth of 1% compared to the first quarter 2016
FY '17 reported and adjusted diluted EPS guidance to a range of $3.25
to $3.65 and $4.05 to $4.45, respectively; up from the previous ranges
of $2.95 to $3.35 and $3.65 to $4.05, respectively
the new share repurchase program, approximately 2.1 million shares
were repurchased through the end of April
LOS ANGELES--(BUSINESS WIRE)--May 4, 2017--Herbalife Ltd. (NYSE: HLF)
reports results for the first quarter ended March 31, 2017.
"We've made a solid start to 2017 exceeding our EPS guidance," said
Michael O. Johnson, Chairman and CEO, Herbalife. "As we transition this
June to our new CEO Rich Goudis and my role as Executive Chairman, we
are more resolute than ever in making a profound and lasting effect on
the nutritional habits of the world and offering people an opportunity
to earn in the process."
"Healthy living is a growing aspiration for more and more
consumers worldwide and we are well positioned to capitalize on this
trend. We offer a powerful person-to-person alternative to traditional
retail, where consumers give our distributors permission to help them
with our extensive range of nutrition products."
For the first quarter 2017, the company reported net sales of $1.1
billion and volume point growth of 1% compared to the prior year period.
China sales and volume significantly exceeded expectations primarily due
to the impact on timing of sales and volume resulted from a price
increase announced in March 2017, effective April 1st, 2017, that we
believe shifted member purchases into the first quarter that would
likely have been made in the second quarter of this year. The expected
negative impact to second quarter sales and volume is included in
On a reported basis, first quarter net income was $85.2 million, or
$0.98 per diluted share, compared to net income of $95.8 million, or
$1.12 per diluted share, for the first quarter of 2016.
Adjusted1 earnings for the first quarter was $1.24 per
diluted share compared to $1.352 per diluted share for the
first quarter of 2016.
Due to currency fluctuations, first quarter 2017 reported and adjusted1
net income were each negatively impacted by $9.0 million, or $0.10 per
reported diluted EPS and adjusted1 diluted EPS.
For the full year 2017, the company is raising its previously issued
reported and adjusted diluted EPS guidance to a range of $3.25 to $3.65
and $4.05 to $4.45, respectively; up from the previous ranges of $2.95
to $3.35 and $3.65 to $4.05 respectively.
| First Quarter 2017 Key Metrics 3 | |||||||||
| Regional Volume Point Metrics | |||||||||
| Volume Points (Mil) | |||||||||
| Region | 1Q '17 | Yr/Yr % Chg | |||||||
| North America | 302.6 | -5 | % | ||||||
| Asia Pacific | 260.8 | 5 | % | ||||||
| EMEA | 274.2 | 5 | % | ||||||
| Mexico | 225.4 | 4 | % | ||||||
| South & Central America | 153.3 | -14 | % | ||||||
| China | 182.0 | 17 | % | ||||||
| Worldwide Total | 1,398.3 | 1 | % |
| Regional Net Sales and Foreign Exchange ("FX") Impact | |||||||||||||||
| Reported Net Sales | Growth/Decline | Growth/Decline | |||||||||||||
| Region | 1Q '17 (mil) | including FX | excluding FX | ||||||||||||
| North America | $ | 229.8 | -7 | % | -7 | % | |||||||||
| Asia Pacific | $ | 219.7 | -1 | % | -2 | % | |||||||||
| EMEA | $ | 209.8 | 6 | % | 6 | % | |||||||||
| Mexico | $ | 104.8 | -4 | % | 8 | % | |||||||||
| South & Central America | $ | 122.4 | -4 | % | -8 | % | |||||||||
| China | $ | 215.6 | -1 | % | 5 | % | |||||||||
| Worldwide Total | $ | 1,102.1 | -2 | % | 0 | % |
Based on current business trends the company's second quarter 2017 and
full year 2017 guidance is as follows:
| Three Months Ending | Twelve Months Ending | |||||||||||||||
| June 30, 2017 | December 31, 2017 | |||||||||||||||
| Low | High | Low | High | |||||||||||||
| Volume Point Growth vs 2016 | (5.0%) | (1.0%) | 2.0% | 5.0% | ||||||||||||
| Net Sales Growth vs 2016 | (4.5%) | (0.5%) | 3.0% | 6.0% | ||||||||||||
| Diluted EPS (a) | $0.65 | $0.85 | $3.25 | $3.65 | ||||||||||||
| Adjusted (b) Diluted EPS | $0.85 | $1.05 | $4.05 | $4.45 | ||||||||||||
| Cap Ex ($ millions) | $40.0 | $50.0 | $125.0 | $155.0 | ||||||||||||
| Effective Tax Rate (a) | 29.0% | 31.0% | 27.5% | 29.5% | ||||||||||||
| Adjusted Effective Tax Rate (a) | 26.0% | 28.0% | 25.0% | 27.0% | ||||||||||||
| Currency Adjusted Net Sales Growth vs 2016 | (4.0%) | 0.0% | 3.6% | 6.6% | ||||||||||||
| Currency Adjusted Diluted EPS | $0.88 | $1.08 | $4.25 | $4.65 |
| (a) Excludes any future potential ongoing tax effects from the exercise of equity awards that could impact the company's tax rate beginning fiscal year 2017 due to a recently issued stock compensation accounting standard. |
| (b) Adjusted diluted EPS and adjusted effective tax rate, for the purposes of 2017 guidance, excludes the impact of expenses relating to challenges to the company's business model, the impact of non-cash interest costs associated with the company's convertible notes, FTC settlement implementation and expenses related to regulatory inquiries. See Schedule A - "Reconciliation of Non-GAAP Financial Measures" for a detailed reconciliation of adjusted diluted EPS to diluted EPS calculated in accordance with GAAP and a discussion of why the company believe these non-GAAP measures are useful. |
With respect to guidance, the company cannot accurately predict the
impact to its share base from any future repurchases in 2017 that may be
made under its share repurchase program and therefore the guidance table
above excludes any impact thereof to EPS.
Forward guidance is based on the average daily exchange rates during the
first two weeks of April.
Adjusted1 diluted EPS guidance for the second quarter 2017
includes a projected currency headwind of approximately $0.03 per
diluted share versus the second quarter of 2016.
Full year 2017 adjusted1 diluted EPS guidance includes a
projected currency headwind of approximately $0.20 per diluted share,
compared to 2016, which is less than the approximately $0.50 headwind
included in the guidance the company provided a quarter ago.
First Quarter 2017 Earnings Conference Call
Herbalife senior management will host an investor conference call to
discuss its recent financial results and provide an update on current
business trends on Thursday, May 4, 2017, at 2:30 p.m. PT (5:30 p.m. ET).
The dial-in number for this conference call for domestic callers is
(877) 317-1296, and (262) 320-2006 for international callers (conference
ID 97879694). Live audio of the conference call will be simultaneously
webcast in the investor relations section of the company's website at http://ir.herbalife.com.
An audio replay will be available following the completion of the
conference call in MP3 format or by dialing (855) 859-2056 for domestic
callers or (404) 537-3406 for international callers (conference ID
97879694). The webcast of the teleconference will be archived and
available on Herbalife's website.
About Herbalife Ltd.
Herbalife is a global nutrition company that has been changing people's
lives with great products since 1980. Our nutrition, weight-management,
energy and fitness and personal care products are available
exclusively to and through dedicated Herbalife Independent Members in
more than 90 countries. We are committed to fighting the worldwide
problems of poor nutrition and obesity by offering high-quality
products, one-on-one coaching with an Herbalife Member and a community
that inspires customers to live a healthy, active life.
We support the Herbalife Family Foundation (HFF) and its Casa
Herbalife programs to help bring good nutrition to children in need. We
also sponsor more than 190 world-class athletes, teams and events around
the globe, including Cristiano Ronaldo, the LA Galaxy and champions in
The company has over 8,000 employees worldwide, and its shares are
traded on the New York Stock Exchange (NYSE: HLF) with net sales of
approximately $4.5 billion in 2016. To learn more, visit Herbalife.com
or IAmHerbalife.com.
The Herbalife Investor Relations website at http://ir.herbalife.com
contains a significant amount of financial and other information about
the company. The company encourages investors to visit its website from
time to time, as information is updated and new information is posted.
| __________________ | |
| 1 Adjusted net income and adjusted diluted EPS are both non-GAAP measures and exclude the impact of expenses relating to challenges to the company's business model, the impact of non-cash interest costs associated with the company's convertible notes, expenses relating to FTC settlement implementation, recovery of re-audit expenses, China grant income and expenses related to regulatory inquiries. See Schedule A - "Reconciliation of Non-GAAP Financial Measures" for a detailed reconciliation of adjusted net income to net income calculated in accordance with GAAP and a reconciliation of adjusted diluted EPS to diluted EPS calculated in accordance with GAAP and a discussion of why we believe these non-GAAP measures are useful. | |
| 2 Prior year amounts have been updated for comparative purposes to adjust for China grant income recognized in Q1 2016. See Schedule A - "Reconciliation of Non-GAAP Financial Measures" for a detailed reconciliation of adjusted net income to net income calculated in accordance with GAAP and a reconciliation of adjusted diluted EPS to diluted EPS calculated in accordance with GAAP and a discussion of why we believe these non-GAAP measures are useful. | |
| 3 Supplemental tables that include Average Active Sales Leader and additional business metrics can be found at http://www.ir.herbalife.com . |
FORWARD-LOOKING STATEMENTS