Herbalife Record first quater 2008, Herbalife Business Success
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LOS ANGELES–(BUSINESS WIRE)
May 1, 2008–Herbalife Ltd. (NYSE: HLF) today reported
Herbalife record first quarter net sales of $604.4 million,
an increase of 19.0 percent compared to the same period of 2007.
This record performance was attributable to double-digit growth
in several of the company’s top countries; the U.S. up 14.3 percent,
Taiwan up 14.8 percent, Italy up 29.7 percent, China up 111.5 percent,
Japan up 10.4 percent, and Spain up 30.2 percent in each case as
compared to the same period in 2007, including a 710 basis point
favorable impact from currency fluctuations.
The company’s Chairman and Chief ExecutiveOfficer
Michael O. Johnson, said, “We are pleased to report our 17th
consecutive quarter of double-digit growth and record net sales, as
all five of our regions reported positive sales growth, reflecting the
strong performance of our independent distributor organization.
Herbalife’s continued success reflects geographic balance among our
portfolio of 65 markets coupled with our distributor’s transition to a
daily consumption retail model. ” Herbalife Record first quater
Herbalife Business Success During the first quarter
2008, total Sales Leaders(1) increased 11.9 percent to 351,448
and new Sales Leaders increased 10.4 percent to 48,805
versus the first quarter of 2007.
The company’s President’s
Team membership increased 12.9 percent to 1,132 members and the
company’s prestigious Chairman’s Club increased 16.7 percent to 35
members. “Double-digit growth of our Sales Leaders at all recognition
levels of our marketing plan demonstrates the vitality we have throughout
the distributor organization. Close collaboration between our independent
distributors and our management team, coupled with strong distributor
leadership, provides the foundation for our continued strong topline
sales performance,” added Johnson.
For the quarter ended March 31, 2008, the company reported net
income of $62.4 million, or $0.93 per diluted share, compared to $41.2
million, or $0.55 per diluted share in the first quarter of 2007. The increase
in net income was primarily attributable to double-digit net sales growth,
expansion in operating profit margins, and a lower effective tax rate.
Excluding the impact of expenses associated with the Realignment
for Growth initiative and increase in tax reserves in first quarter 2007(2),
adjusted diluted earnings per share in the first quarter of 2008 was a $0.32
improvement compared to the $0.61 in the first quarter of 2007,
reflecting an increase of 52.1 percent.
Herbalife Record first quater.
During the first quarter, the company repurchased 0.4 million of
its common shares through open market transactions at an average price
of $39.28 for an aggregate cost of $17.7 million. Since this share repurchase
program was authorized in April 2007 through first quarter 2008,
the company has repurchased 9.5 million shares at an aggregate cost
of $383.5 million, which is 85 percent of the $450 million authorization,
or approximately 13 percent of its common stock, outstanding at the
end of March 2008. During the first quarter, the company invested
approximately $25 million in capital expenditures, primarily
related to enhancements to its management information systems,
including the roll out of its Oracle ERP system, and additional infrastructure
investments to improve distributor service levels in high growth markets.
First Quarter 2008 Business Highlights
The company supported the development and training of its
distributors during the first quarter by hosting multiple events,
including over 20,000 distributors at the South America Extravaganzas,
as well as training events in the North America, EMEA, Mexico and
Central America and Asia Pacific regions.
In March, Herbalife hosted its annual global Herbalife Honors
event in Singapore where 1,100 President’s Team members from around
the world met and shared best practices and Herbalife distributors
received approximately $34 million in Mark Hughes Bonus awards related
to 2007.
Regional Performance
The Europe, Middle East and Africa (EMEA) region, the company’s
largest region, reported net sales of $158.0 million in the first
quarter of 2008, an increase of 10.3 percent versus the same period of
2007. However, excluding the benefit of currency fluctuations, net
sales decreased 1.7 percent. The EMEA region realized net sales growth
in several of its top markets during the first quarter of 2008,
including Russia up 64.6 percent, Spain up 30.2 percent, and Italy up
29.7 percent, in each case compared to the first quarter of 2007.
These net sales gains were partially offset by declines in other
markets including Germany down 17.5 percent. The Netherlands, a top 10
market in the EMEA region, was essentially flat versus the comparable
period of 2007. New Sales Leaders in the region, as of March 31, 2008,
decreased 14.5 percent versus March 31, 2007 to 6,533.
Total Sales Leaders in the region, as of March 31, 2008, decreased 8.3
percent to 61,802 versus March 31, 2007. The Asia Pacific region
reported net sales of $128.2 million in the first quarter of 2008,
up 23.7 percent versus the same period of 2007.
Excluding currency fluctuations, net sales increased 15.7
percent. The increase is attributable to net sales growth in China up
111.5 percent, Taiwan up 14.8 percent, Japan up 10.4 percent, and
South Korea up 6.2 percent.
New Sales Leaders in the region, as of March 31, 2008, increased
14.0 percent versus March 31, 2007 to 13,127.
Total Sales Leaders as of March 31, 2008 increased 25.9
percent to 86,695 versus March 31, 2007. These figures include China
sales employees.
The North America region reported net sales of $118.6 million in
the first quarter of 2008, up 13.5 percent versus the same period of
2007, driven by growth in the US of 14.3 percent versus first quarter
2007. Excluding currency fluctuations, net sales increased 12.9
percent.
New Sales Leaders in the region, as of March 31, 2008, were
flat versus March 31, 2007 at 9,010. Total Sales Leaders in the
region, as of March 31, 2008, increased 17.4 percent to 67,749 versus
March 31, 2007.
The South America region reported net sales of $102.0 million in
the first quarter of 2008, up 67.5 percent versus the same period of
2007. Excluding currency fluctuations, net sales increased 54.2
percent. The growth in the region was primarily attributable to double
and triple digit growth in key markets including Venezuela up 299.6
percent, Bolivia up 461.3 percent, and Peru up 213.5 percent, as well
as the region’s largest market, Brazil up 7.1 percent. New Sales
Leaders in the region, as of March 31, 2008, increased 40.7 percent
versus March 31, 2007 to 12,491.
Total Sales Leaders in the region, as of March 31, 2008, increased
29.0 percent to 70,041 versus March 31, 2007.
The Mexico and Central America region reported net sales of $97.6
million in the first quarter of 2008, up 1.8 percent versus the same
period of 2007. Excluding currency fluctuations, net sales for the
region decreased 0.3 percent. Mexico, the largest market in the
region, had a sales decrease of 0.5 percent.
New Sales Leaders in the region, as of March 31, 2008, increased
6.4 percent versus March 31, 2007 to 7,644.
Total Sales Leaders in the region, as of March 31, 2008, decreased
0.8 percent to 65,161 versus March 31, 2007. Second Quarter
2008 and Full Year 2008 Guidance Based on its current business
trends, the company is raising its full year 2008 diluted earnings
per share guidance to be in a range of $3.52 - $3.57 reflecting
current foreign exchange rates and an effective tax rate of between
30.5 percent and 31.5 percent. This new guidance reflects an
earnings per share growth of 30 percent to 32 percent compared
to the adjusted 2007 earnings per share of $2.71.
The company is providing guidance for the second quarter of 2008
in the range of $0.89 - $0.92 for diluted earnings per share
reflecting an effective tax rate of between 29.5 percent and 30.5
percent. Second quarter investment in capital expenditures is expected
in the range of $25 million - $27 million, and full year 2008 capital
expenditure guidance is expected to be in the range of $89 million -
$92 million.
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Herbalife Record first quater | Herbalife Business success | Herbalife profit
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