Herbalife's Misleading Lesson About The Collapse Of Qualification Buying
Christine Richard • 304 Comments
Christine Richard • 304 Comments
Thu, May 5, 4:15 PM
Wed, May 4, 5:35 PM
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Fri, Apr. 1, 3:47 AM
- While the rates of obesity have leveled off in some countries where it's already a public health concern, other places are seeing their obesity rates increase, propping up the global average.
- "Over the past four decades, we have transitioned from a world in which underweight prevalence was more than double that of obesity, to one in which more people are obese than underweight," according to a study published in The Lancet.
- By 2025, one-fifth of adults around the world are forecast to be obese, including 40% of adults in the U.S.
- Related tickers: NUTR, PLNT, WTW, NTRI, FIT, HLF, VVUS, ARNA, GNC, MED, NATR, OREX, LTM, FINL
Thu, Mar. 3, 9:15 AM
Thu, Mar. 3, 7:09 AM
- In a regulatory filing, Herbalife (NYSE:HLF) discloses that its relatively new metric for "Active New Member" growth that it reported in some of its recent earnings calls was calculated wrong. It says database scripting errors led to the errant inclusion of additional categories of data in calculating the metric for parts of 2015 that were not included in the prior period calculations and quarterly aggregation issues that created period-to-period variances depending on when the greatest level activity occurred during the relevant period. The problem was not identified earlier because there was limited visibility into the likely rate of change upon its first use. The company has taken corrective action and states that the situation does not impact its previously reported financial results.
- In most cases, the revised growth numbers are lower that those previously reported. Examples include: worldwide active new member growth excluding China for Q4 2015 is now 3.2% instead of 16.7%; U.S. active new member growth for Q4 2015 is now 30.7% instead of 71.0%; EMEA active new member growth for Q4 2015 is now 17.7% instead of 44.0%.
- A few of the growth numbers went up when adjusted: worldwide ex. China for Q2 2015: 3.7% vs. 1.0%; Brazil Q3 2015: 71.9% vs. 65.0%; Mexico Q2 2015: 21.7% vs. 14.0%.
- Shares are off 15% premarket on light volume.
Wed, Mar. 2, 12:01 PM
- Star hedge fund manager Bill Ackman's Pershing Square Holdings is down almost 20% in 2016 thanks to being on the wrong side of two big bets: Valeant Pharmaceuticals (VRX +2.1%) and Herbalife (HLF -0.3%). He is long Valeant, down 34% this year and short Herbalife, up over 4% ytd and up almost 33% since mid-February.
- The patience of Mr. Ackman's investors is being profoundly challenged considering his fund lost 20.5% last year. It may be time for surrender, at least as far as Herbalife is concerned. On February 25, HLF rallied after posting strong Q4 sales and earnings. The bear seems to have vanished into the wilderness.
- Previously: Herbalife soars after Q4 beat; company in talks with FTC (Feb. 25)
- Previously: Ackman, Herbalife probes fizzle (Feb. 1)
- Previously: Valeant craters on news of SEC investigation (Feb. 29)
- Previously: Valeant expected to restate earnings; shares slump 10% after hours (Feb. 22)
Fri, Feb. 26, 12:45 PM
Fri, Feb. 26, 9:17 AM
- Gainers: RRM +49%. SUNE +31%. AMTG +31%. SGMS +27%. STMP +26%. GOL +19%. SPLK +17%. JCP +16%. HLF +13%. BIDU +11%. SYN +10%. GLBL +8%. WLL +9%. FCX +7%. CHK +7%. PANW +8%. NRF +6%. TCK +6%. MRO +6%. KHC +6%. GRPN 5%. HLT 5%.
- Losers: RJET -83%. PPHM -60%. CARA -36%. WTW -28%. SWN -14%. GG -11%. FOLD -9%. RBS -8%. MNKD -6%. ARI -5%.
Thu, Feb. 25, 6:34 PM
- Herbalife (NYSE:HLF) is up 15.1% after hours to $52.66 after beating Q4 estimates (strongly on EPS) and reporting 5% Y/Y volume points growth, better than prior guidance of -1.5% to 1.5%.
- The beat has been accompanied by light guidance: Q1 revenue growth of -3% to -6% and EPS of $0.97-$1.07 (below a consensus of -0.7% growth and EPS of $1.09), and 2016 sales growth of -0.5% to 2.5% and EPS of $4.05-$4.50 (below a consensus of 4.2% growth and EPS of $4.56).
- Volume points totaled 1.35B in Q4. They were flat Y/Y in North America, up 2% in Asia-Pac, up 15% in EMEA, up 4% in Mexico, down 7% in South/Central America, and up 30% in China. Q1 volume points guidance is at -1.5% to 1.5%, and full-year guidance at 1.5%-4.5%.
- Along with its results, Herbalife has disclosed it's talking with the FTC "regarding a potential resolution" of its probe of the company. The company cautions the outcome of the talks, and the nature of any settlement, are uncertain.
- Herbalife's Q4 results, earnings release
Thu, Feb. 25, 4:19 PM
Wed, Feb. 24, 5:35 PM
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Mon, Feb. 1, 2:58 AM
- Two government probes into the conduct of longtime antagonists Pershing Square and Herbalife (NYSE:HLF) have failed to find sufficient evidence of criminal wrongdoing by either party, according to WSJ.
- The U.S. attorney's office in Manhattan and FBI investigated claims that Herbalife has a fraudulent business model, and an inquiry into allegations that Pershing manipulated the company's stock price.
- The probes could be rekindled if additional evidence surfaces.
Nov. 17, 2015, 4:23 PM
- The U.S. Department of Justice indicts executives of privately held USPlabs for criminal conspiracy to distribute toxic substances contained in their dietary supplements Jack3D and other products. According to the DOJ, the company altered its labeling and packaging regarding ingredients, made misrepresentations to regulators, retailers and consumers, knowingly and willfully sold products containing toxic substances and made false claims about the effectiveness of the products.
- The DOJ also brought 12 civil actions, including five last week, but did not specify who they were directed to.
- After hours action: Herbalife (NYSE:HLF): down a fraction; GNC Holdings (NYSE:GNC) down 7%; Vitamin Shoppe (NYSE:VSI): down 5%.
Nov. 17, 2015, 12:22 PM
Nov. 16, 2015, 7:49 PM
- In its 13F filing, Soros Fund Management revealed it's bailed out on its Herbalife (NYSE:HLF) bet by liquidating a near 2M-share position in Q3 -- likely at a profit -- and added stakes in Netflix (NASDAQ:NFLX) and Wynn Resorts (NASDAQ:WYNN), as well as boosting Allergan (NYSE:AGN) as its top holding.
- Herbalife is up almost 47% YTD as Soros and Carl Icahn lined up on the long side against bearish investors including Bill Ackman. The Soros fund also reduced its put holdings on the S&P 500, to 836K shares from 2.9M.
- Behind the Allergan add, Soros disclosed a $137.5M investment in PayPal (NASDAQ:PYPL) and ended the quarter with a $32.8M investment in Netflix, as well as $9.9M in Wynn.
- Aside from Allergan, the Soros Fund's biggest holding was in Adecoagro (NYSE:AGRO).
- Overall market value of the Soros holdings dropped to $6.61B, from $10.75B.
Nov. 3, 2015, 6:36 PM
- Herbalife (NYSE:HLF) Q3 results ($M): Global Net Sales: 1,102.9 (-12.2%); North America: 219.4 (-1.8%); Mexico: 113.4 (-21.2%); South/Central America: 138.1 (-32.7%); EMEA: 182.5 (-10.7%); Asia Pacific: 224.6 (-24.6%); China: 224.9 (+24.1%).
- Net Income: 93.6 (+735.7%); EPS: 1.09 (+738.5%); CF Ops: 134.5 (+32.0%).
- Volume Points (NYSE:M): North America: 285.0 (-5.9%); Mexico: 207.2 (+5.3%); South/Central America: 188.7 (-7.7%); EMEA: 219.0 (+10.1%); Asia Pacific: 258.0 (-15.3%); China: 149.8 (+24.1%).
- Q4 Guidance: Volume Point Growth: (1.5) - 1.5%; Net Sales Growth: (8.5 - 5.5%); Non-GAAP EPS: $0.85 - 0.95; Currency Adjusted EPS: $1.12 - 1.22.
- 2015 Guidance: Volume Points Growth: (3.5 - 2.8%) from (4.0 - 1.0%); Net Sales Growth: (11.1 - 10.4%) from (9.5 - 6.5%); Non-GAAP EPS: $4.65 - 4.75 from $4.50 - 4.70; Free Cash Flow: $490 - 450M from $470M - 490M; CF Ops: $400M - 430M from $340M - 380M; Currency Adjusted EPS: $6.19 - 6.29.
- 2016 Guidance: Volume Point Growth: 2.5 - 5.5%; Net Sales Growth: 4.5 - 7.5%; Non-GAAP EPS: $4.35 - 4.75 ($0.50 currency headwind); Currency Adjusted EPS: $4.85 - 5.25.
- Shares are down 3% after hours on increased volume.
Herbalife Ltd. is a global nutrition company. It offers range of science-based weight management products, nutritional supplements and personal care products intended to support a healthy lifestyle. The company's products are categorized into four principal groups: weight management, targeted... More
Industry: Drug Related Products
Country: United States
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