Nutritional supplement maker Herbalife Ltd (HLF.N) on Sunday raised its current-quarter adjusted profit forecast and said it exceeded a key threshold under its agreement with the U.S. Federal Trade Commission.
Herbalife now expects adjusted profit of 95 cents-$1.15 in the second quarter ending June 30, compared to the 88 cents-$1.08 percent it expected earlier.
However, the company said it expected sales to fall by 6-2 percent due to the transition to the new FTC rules in the U.S. along with softness in its Mexico business. Herbalife had earlier expected sales to fall by 4.5-0.5 percent.
The Los Angeles-based company also said that 90 percent of sales in the United States in May were documented purchases by consumers, exceeding the 80 percent threshold called for in its agreement with FTC.
“These figures should put an end to any questions regarding demand for our nutrition products and the strength of our go-to-market business model,” Chief Executive Richard Goudis said.
Herbalife, which has been accused by billionaire investor William Ackman of being a pyramid scheme, agreed to pay $200 million and change the way it does business to avoid being labeled as such by regulators.
In December 2012, hedge-fund manager William Ackman unveiled a $1 billion short position against Herbalife in a withering, hours-long presentation.
Ackman has accused the company of being an illegal pyramid scheme numerous times, and even starred in a recent documentary about Herbalife called “Betting on Zero” to explain his position. But as it stands, he is losing out.
CNBC first reported about Herbalife’s outlook earlier on Sunday. cnb.cx/2qWkGu6
(Reporting by Subrat Patnaik in Bengaluru; Editing by Sunil Nair)