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Herbalife Nutrition Jumps After a Strong Q2 and Raised Earnings Guidance

By Daniel Miller – Updated Aug 2, 2018 at 1:44PM

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An accelerating top and bottom line, along with results that topped Wall Street estimates, have Herbalife on the rise.

What happened?

Shares of Herbalife Nutrition Ltd. (HLF 0.42%), an international nutrition company, were up 10% as of 11:38 a.m. EDT on Thursday after second-quarter earnings and its outlook both showed strength.

So what

Net sales jumped 12% during the second quarter, compared to the prior year, to $1.3 billion, topping analysts' estimates. Adjusted earnings per share checked in at $0.80, far ahead of analysts' estimates calling for $0.68, and a 5.3% increase compared to the prior year's result. "Our top-line growth rate accelerated in the second quarter, reflecting the strength of our business model to provide solutions to many of today's global nutrition and wellness megatrends," said CEO Rich Goudis in a press release.

Man drinking a protein or nutritional shake.

Image source: Getty Images.

Now what

Here's where it gets a little tricky. Management expects volumes to increase for the full-year 2018 by 6% to 9%, compared to its prior guidance of a 3% to 7% increase. But net sales are expected to fall despite the increased volume due to a 330-basis point headwind from currency translations. It's all good news on the bottom line, where management anticipates full-year EPS in the range of $2.60 to $2.80, compared to the prior guidance range of $2.53 to $2.73. It's been a strong 2018 for investors, with the stock increasing 65% including today's pop.

Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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