Herbalife (HLF 69.00, -4.92) updated its guidance for the second quarter and the fiscal year this morning, but the stock has retreated 6.7% despite the news. Today's decline comes after the stock has spent the past month within a few points of its record high from December 2013 (81.75).
For the second quarter, Herbalife expects earnings between $0.95 and $1.15 per share, up from previous guidance for earnings between $0.85 and $1.05 per share. Second quarter revenue is expected to decline between 2.0% and 6.0%, coming in between $1.13 billion and $1.18 billion. Herbalife's previous guidance called for a revenue decline between 0.5% and 4.5%. It is worth noting that the second quarter of 2016 was highlighted by record sales volume.
Herbalife expects that the second quarter decline in revenue will be made up during the remainder of the fiscal year. The company made a modest adjustment to its full year guidance, but the outlook is still below Street expectations. Herbalife primed the market for earnings between $4.10 and $4.50 per share, up from previous guidance for earnings between $4.05 and $4.45 per share. Revenue is expected to increase between 0.5% and 3.5%, coming in between $4.51 billion and $4.65 billion. Herbalife's previous guidance called for full year revenue growth between 0.3% and 3.3%.
In addition to updating its guidance, Herbalife announced that its distributors have changed the methodology used to document retail sales. The company expects these processes to become more efficient, leading to an acceleration in sales growth.