Los Angeles nutritional-products company Herbalife Ltd. said its sales and profits slipped in the second quarter as it adopted more conservative business practices and absorbed unfavorable foreign-exchange rates.
Still, the company’s earnings for the three months that ended June 30 beat analysts’ expectations and its own estimates. Herbalife also raised its full-year guidance.
The maker of a meal-replacement shake powder, protein bars, vitamins, teas and other products said Wednesday that it earned $82.8 million, or 97 cents a share. That was down from $119.5 million, or $1.31 a share, in the same period last year.
Net sales fell 11% to $1.16 billion from $1.3 billion.
Herbalife’s results have slipped this year as it reduced the amount of product its new sales members can buy. The move is intended to help them slowly grow their businesses and keep them involved with the company longer.
“The changes we implemented were the right ones,” said Herbalife Chief Executive Michael O. Johnson in a conference call with analysts.
The company said 12% of its revenue decline was the result of unfavorable exchange rates with multiple currencies. Sales were down throughout much of the world but were up 39% in China.
Excluding some nonrecurring expenses, Herbalife said it earned $1.24 a share, beating its guidance of $1.05 to $1.15. Analysts, on average, had expected earnings of $1.11 a share.
The company raised its estimated profit for the full year to a range of $4.50 to $4.70 a share, from a previous range of $4.30 to $4.60.
Shares, which have risen almost a third this year, were up more than 5% in after-hours trading. They had closed down $1.20, or 2.4%, to $49.10 before the earnings release.
Herbalife has been one of the most hotly debated companies in Wall Street for nearly three years, since hedge fund manager Bill Ackman accused the company of operating a pyramid scheme.