Earnings Results: Herbalife puts former CEO back in charge and withdraws guidance; stock slides

by | Nov 1, 2022 | Stock Market

Shares of Herbalife Nutrition Ltd. slid Monday after the nutrition marketer pulled its full-year outlook and announced that its chief executive was stepping down, saying bigger economic pressures and rising prices weighed on consumer demand.  Herbalife
HLF,
-1.16%
said Chief Executive John Agwunobi would step down and Michael Johnson would assume the role of interim chief executive and chairman.

The marketing company, whose nutrition products rely on individual promoters it calls “distributors,” said it expected to name a new CEO next year. Johnson has already served as CEO of Herbalife from 2003 to 2017, and from 2019 to early 2020. He held the role of chairman from 2007 to early 2020. Shares were down 4% after hours on Monday, but had fallen as much as 9.9% in the minutes following the closing bell. The announcement follows difficulties earlier in the year with Herbalife’s distributors, although business appeared to even out during the second quarter. The company on Monday also pulled its full-year outlook, citing “the rapidly shifting macroeconomic sentiment and backdrop, as well as increased volatility in the marketplace.” Executives said they believed “macroeconomic inflationary pressures challenged members’ operations and customer demand during the quarter.” For the third quarter, Herbalife’s net sales fell 9.5% to $1.3 billion, compared with $1.43 billion in the prior-year quarter. Herbalife reported net income of $82.2 million, or 83 cents a share, compared to $117.4 million, or $1.09 a share, in the period a year ago. Adjusted for non-cash interest expense and amortization, along with other expense …

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