Key Points
Sales of Herbalife's nutritional products are rising.
Profits are growing even faster.
Shares of Herbalife (NYSE:HLF) rallied 8% on Tuesday after the health and wellness products distributor reported solid growth in revenue and cash flow.
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Global gains
Herbalife's net sales rose 6% year over year to $1.35 billion in the third quarter. The company's Asia Pacific segment enjoyed particularly strong growth, with sales up 18%.
More than 3 million independent distributors in over 90 markets help to market Herbalife's products by selling directly to their friends, family, and other personal acquaintances.
"Some run a nutrition club, some lead transformation challenges, some build communities through wellness profiles in person and online, while others use social media and social selling or run fit clubs or fit competitions," interim CEO John DeSimone said during a conference call with analysts. "No matter the business model, each brings a personal connection to customers that no company could create on its own."
All told, Herbalife's adjusted net income surged 33% to $68.5 million, or $0.64 per share.
The company also continues to crank out cash. Year-to-date operating cash flow climbed 27% to $298 million.
Herbalife's growing profits are enabling it to pay down debt while also boosting capital returns to shareholders. The company announced a $250 million stock buyback program in September.
Raised guidance
Encouraging ongoing sales trends prompted Herbalife to lift its full-year projections. Management now sees net sales growing by 4.9% to 5.9% in 2026, up from a prior forecast of 2.5% to 5.5%.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.