Herbalife (HLF) Q3 earnings: what to expect

What happened

Herbalife will report earnings on Monday afternoon. Last quarter it reported revenues of $1.33 billion, up 5.4% year on year, beating analysts' revenue expectations. This quarter the market expects revenue to grow 2.8% year on year, in line with the 2.7% increase recorded in the same quarter last year.

Confirmed

Global impact / market context

Herbalife has missed Wall Street's revenue estimates multiple times over the last two years, so the 2.8% expected growth faces a patchy record. Analysts reconfirmed estimates in the last 30 days, which suggests they expect steady results, while last quarter's EPS miss and EBITDA beat complicate the setup.

Analyst inference

Peer results in consumer staples were mixed: Medifast revenues fell 19.4% year on year but beat expectations, and Vita Coco revenues rose 33.7% and topped estimates. Medifast traded up 5.1% after its report, offering a read-across for how Herbalife's own revenue surprise or miss might be received.

Analyst inference

What to watch

1. Watch whether Herbalife's revenue grows near the 2.8% year-on-year rate the market expects this quarter, close to the 2.7% increase it recorded in the same quarter last year. Confirmed
2. Watch whether Herbalife beats or misses analysts' revenue estimates, since it has missed Wall Street's revenue estimates multiple times over the last two years, which would shape investor reaction. Proposed
3. Watch whether Herbalife's profit per sale recovers after last quarter's significant miss of analysts' EPS estimates, which means earnings per share, even as EBITDA guidance slightly topped expectations. Analyst inference

Evidence

• stockstory.org