Herbalife (HLF—NYSE) stock edged lower following the nutrition company’s year-end financial report.
The Los Angeles-based company said late Thursday that 2016 revenue remained flat at $4.5 billion, on 5 percent higher volume than the previous year. Herbalife reported $4.85 a share in adjusted profit, versus $4.95 in 2015.
In accordance with its recent settlement with the U.S. Federal Trade Commission, the company has established a clear delineation between the independent contractors who sell its product and recruit other sellers, and the preferred customers who buy at wholesale or discounted pricing. Management said about 300,000 U.S. customers have opted for Preferred Member status. Among top Independent Distributors, classified as sales leaders, turnover was at an all-time low of 39.1 percent worldwide.
“2016 was a dynamic and record-breaking year. Our members continue to successfully build customer-focused businesses, which is evident in our record volume and retention metrics,” said Michael O. Johnson, Chairman and CEO of Herbalife.
Fourth-quarter revenue was $1.05 billion, down 5 percent or 1 percent when factoring out the impact of currency exchange.
The company posted a quarterly profit of $99.4 million, or $1.16 a share, up 18 percent from a year earlier. Excluding one-time costs, profit fell to $1 a share from $1.17 a share.
In a poll by Thomson Reuters, analysts had expected earnings of 97 cents a share on $1.05 billion in revenue.
Separately, the company announced plans to form a joint venture with China’s Tasly Holding Group, to facilitate development of new Herbalife products. The partnership unites Tasly’s portfolio of Traditional Chinese Medicine, or TCM, formulations and research with Herbalife’s regulatory and commercial development expertise.
Herbalife’s board has earmarked $1.5 billion for share repurchases over the next three years. In 2017, the company expects adjusted profit of $3.65 to $4.05 a share, with sales up as much as 3.3 percent, compared to analysts’ projections of $5 a share on a 1.3 percent sales increase.
After closing at $59.39 ahead of the news on Thursday, shares in Herbalife have been trading lower, closing out Monday’s session at $57.19
