What Happened?
Shares of health and wellness products company Herbalife (NYSE: HLF) fell 8.5% in the afternoon session after the company reported weak first quarter 2025 results which included EBITDA guidance for next quarter that missed and organic revenue that fell short of Wall Street's estimates. Sales declined 3.4% year over year, but when adjusting for currency impacts, sales rose a modest 1.4%, with strength in Latin America and EMEA offset by steep declines in China and a pullback in North America. On the other hand, Herbalife beat analysts' EBITDA and EPS expectations. Overall, this quarter was mixed yet weaker.
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What The Market Is Telling Us
Herbalife’s shares are extremely volatile and have had 33 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 2 months ago when the stock gained 44.6% on the news that the company reported impressive fourth-quarter results, which blew past analysts' EPS and EBITDA estimates.
On the other hand, revenue guidance for the next quarter missed expectations, with sales projected to decline between 5.5% and 1.5% y/y. Full-year EBITDA guidance also fell short of Wall Street's estimates, raising concerns about the company's ability to sustain its margins and profits.
Overall, this was a solid quarter. Separately, the company announced that Stephan Gratziani is stepping into the CEO's chair, replacing Michael Johnson, who will transition to the role of Executive Chairman.
Herbalife is down 1.3% since the beginning of the year, and at $6.59 per share, it is trading 47.2% below its 52-week high of $12.49 from July 2024. Investors who bought $1,000 worth of Herbalife’s shares 5 years ago would now be looking at an investment worth $188.99.
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