What Happened?
Shares of health and wellness products company Herbalife (NYSE: HLF) jumped 8.3% in the morning session after the company reported third-quarter financial results that surpassed analyst expectations.
Herbalife posted net sales of $1.27 billion, a 2.7% increase from the same period last year, narrowly beating revenue forecasts. More impressively, the company's adjusted earnings per share came in at $0.50, exceeding analyst predictions by 8.4%. The positive results were driven by strong profitability, as adjusted EBITDA of $184.2 million beat consensus estimates by over 16%. Additionally, the company's free cash flow margin improved significantly to 9.3% from 5.8% in the prior year's quarter, indicating stronger cash generation.
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What Is The Market Telling Us
Herbalife’s shares are very volatile and have had 29 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock gained 44.6% on the news that the company reported impressive fourth-quarter results, which blew past analysts' EPS and EBITDA estimates. On the other hand, revenue guidance for the next quarter missed expectations, with sales projected to decline between 5.5% and 1.5% y/y. Full-year EBITDA guidance also fell short of Wall Street's estimates, raising concerns about the company's ability to sustain its margins and profits. Overall, this was a solid quarter. Separately, the company announced that Stephan Gratziani is stepping into the CEO's chair, replacing Michael Johnson, who will transition to the role of Executive Chairman.
Herbalife is up 34.8% since the beginning of the year, but at $9.01 per share, it is still trading 16.9% below its 52-week high of $10.83 from July 2025. Investors who bought $1,000 worth of Herbalife’s shares 5 years ago would now be looking at an investment worth $185.71.
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