Herbalife Shares Tank After Q3 Earnings Miss

Herbalife Ltd. HLF reported third quarter financial results Monday and disappointed investors. Shares dropped 13 percent after the earnings release.

Net sales came in at $1.3 billion, slightly below estimates of $1.32 billion and reflected an increase of 4 percent compared to the same period in 2013.

Adjusted net income for the quarter was $125.1 million, or $1.45 per diluted share, below estimates of $1.51 and above the $152.1 million, or $1.41 per diluted share for the same period in 2013.

On a reported basis, the company announced third quarter net income of $11.2 million, or $0.13 per diluted share, compared to $142.0 million, or $1.32 per diluted share for the same period in 2013.

Guidance for fourth quarter FY 2014 included an unfavorable impact from currency rates of approximately $0.31 compared to the prior year, inclusive of approximately $0.22 from Venezuela. Guidance for FY 2015 includes a currency headwind of approximately $0.66, including approximately $0.45 from Venezuela.

Michael Johnson, chairman and CEO stated, “In the quarter we saw volume increases in two-thirds of our 91 countries, especially Russia and China. Excluding the impact of currency translation in Venezuela, the company had solid increases in both volume and net sales. We continue to implement initiatives that we believe will further strengthen our foundation and drive long-term improvements in activity, productivity and retention of our Sales Leaders. We are proud of our members’ ability to grow the business in the short term while embracing changes that we believe will enhance the long-term opportunity.”

Herbalife recently traded at $48.50, down 13.2 percent.