The 10-second takeaway
For the quarter ended March 31 (Q1), Herbalife beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share grew significantly.
Margins improved across the board.
Herbalife logged revenue of $964.2 million. The 10 analysts polled by S&P Capital IQ expected to see revenue of $892.9 million on the same basis. GAAP reported sales were 21% higher than the prior-year quarter's $795.1 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 $0.88. The 11 earnings estimates compiled by S&P Capital IQ anticipated $0.81 per share. GAAP EPS of $0.88 for Q1 were 26% higher than the prior-year quarter's $0.70 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 46.7%, 40 basis points better than the prior-year quarter. Operating margin was 16.0%, 50 basis points better than the prior-year quarter. Net margin was 11.2%, 10 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $961.9 million. On the bottom line, the average EPS estimate is $0.95.
Next year's average estimate for revenue is $3.86 billion. The average EPS estimate is $3.68.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 378 members out of 509 rating the stock outperform, and 131 members rating it underperform. Among 156 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 107 give Herbalife a green thumbs-up, and 49 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 $80.50.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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