Herbalife Ltd. | $HLF Stock | Shares Soar After Ackman Exits Bet Against Herbalife


Herbalife Ltd. (NYSE: HLF)


Shares of Herbalife Ltd. soar more than 7% in trading Wednesday after a news that billionaire hedge-fund activist Bill Ackman had exited a massive gamble that the nutritional-supplement maker would fall to zero. The share price moved up as much as 8.6%, or by $7.44, to $94.25 during trading.

Ackman made a bet against Herbalife Ltd. five years ago through his hedge fund company Pershing Square Capital Management LP, accusing the nutritional-supplement company of operating a pyramid scheme. Herbalife Ltd. has persistently denied those accusations and the bet that it would eventually collapse in value.

Wednesday’s surge was also spiked by the reaction to Herbalife’s plans intensifying its share purchase program and of conducting a 2-for-1 split of its stock. The company also intends to change its name to Herbalife Nutrition Ltd. to reflect its growing expertise and leadership in the nutrition field.

HLF Earnings & Outlook


Herbalife reported better-than-anticipated 4Q2017 earnings per share (EPS) on Feb 22, 2018. Its 4Q2017 adjusted earnings per share (EPS) was $1.29, neatly surpassing Wall Street’s estimate of $0.95 and increasing 28% on a year-over-year basis.

The company’s top line was boosted by favorable currency rates, improved pricing, and strong performances in China, Europe, the Middle East, and Africa.

HLF expects its 1Q2018 adjusted EPS to be $0.9–$1.1, reflecting a year-over-year decline when compared with $1.24 adjusted EPS in 1Q2017. Tough year-over-year comparisons in China and North America are likely to remain a drag on the company’s 1Q2018 results. For the full year, the Herbalife expects its bottom line to be $4.6–$5.

Herbalife’s CEO Comments

Rich Goudis, the chief executive of Herbalife Ltd. said in a statement that his company’s strong financial performance is a testament to the demand for its quality nutrition products, great-tasting, the company’s unique, personalized and effective distribution channel and its global geographic reach. 

Herbalife Profile

Herbalife Ltd is a global nutrition company that makes and sells weight management, healthy snacks and meals, fitness and sports, targeted and energy nutritional products, and personal care products.

Its products are categorized into five groups: targeted nutrition, sports, energy; and fitness, outer nutrition; weight management; and promotional, literature; and other. The Company marketed and sold about 140 products including over 4,700 stock keeping units globally as of 2016.

Herbalife’s segments of operation are based on geographical locations in six regions: North America; South and Central America; Mexico; Europe, Africa, China, and the Middle East. Products in its weight management category include protein shakes, meal replacement, drink mixes, healthy snacks and weight loss enhancers.

Representative products of the category include Herbal Tea Concentrate, Formula 1 Healthy Meal, Protein Drink Mix, Total Control, Prolessa Duo, Protein Bars and Personalized Protein Powder.

Products in the targeted nutrition category include nutritional and dietary supplements containing vitamins, herbs, minerals as well as other natural ingredients. Representative products of the targeted nutrition category include Niteworks, Aloe Concentrate, Best Defense, COQ10 Plus, and Garden 7 phytonutrient supplement.

Products in the outer nutrition category include hair care, body care, and facial skin care products. The energy, fitness, and sports products category includes Herbalife24, Liftoff, and H3O hydration drink.

Herbalife Ltd competes with Walmart, Nature’s Sunshine, Avon Products, NuSkin Enterprises, Melaleuca, Melaleuca, Melaleuca, Tupperware, General Nutrition Centers, General Nutrition Centers and Jenny Craig. The Company is traded on the New York Stock Exchange and has more than 8,000 employees worldwide. –Herbalife