Why Herbalife Stock Fell as Much as 14% Today
Shares of Herbalife (NYSE: HLF), a maker and marketer of nutrition products, fell sharply on May 4, dropping just shy of 14% at one point during the day. The big news was the company's first-quarter 2022 earnings update, which hit the street after the close on May 3. Investors were clearly unhappy, and the biggest negative was the company's revised outlook for 2022.
Herbalife reported first-quarter 2022 revenues of $1.34 billion, an 11% decrease from the same quarter in 2021. The company tried to put a positive spin on that figure, however, by highlighting that sales were up 5.8%, compared to the first quarter of 2020. The upshot was that 2021 was an unusual year, with sales likely buoyed by events surrounding the coronavirus pandemic.
Notably, though, in the 2022 first-quarter update, management pointed out that, "as a group, the behavior of distributors that joined the business during the pandemic has departed from historical trends and is below the Company's expectations." That's not good.
Source Fool.com
