The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Herbalife beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded and GAAP earnings per share expanded significantly.
Margins dropped across the board.
Herbalife tallied revenue of $1.02 billion. The seven analysts polled by S&P Capital IQ expected to see net sales of $997.0 million on the same basis. GAAP reported sales were 14% higher than the prior-year quarter's $895.2 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $1.04. The nine earnings estimates compiled by S&P Capital IQ predicted $1.01 per share. GAAP EPS of $1.04 for Q3 were 20% higher than the prior-year quarter's $0.87 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 47.7%, 20 basis points worse than the prior-year quarter. Operating margin was 15.8%, 110 basis points worse than the prior-year quarter. Net margin was 11.6%, 50 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $1.02 billion. On the bottom line, the average EPS estimate is $0.98.
Next year's average estimate for revenue is $4.01 billion. The average EPS estimate is $3.98.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 395 members out of 519 rating the stock outperform, and 124 members rating it underperform. Among 144 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 99 give Herbalife a green thumbs-up, and 45 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Herbalife is buy, with an average price target of $77.25.
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