Sales & Earnings In Brief

Record Q2 for Herbalife shatters estimates

The multi-level marketer's second-quarter operating earnings per share reaches 88 cents, up 35% compared to a year ago and far exceeding analyst estimates of about 75 cents. Herbalife reported record second-quarter sales of $879.7 million, a 27.7% jump, and net income up 35.3% to $111.2 million. The firm increased its full-year EPS guidance to a range of $2.97-$3.07, compared to a previous guidance range of $5.54-$5.78, before a two-for-one stock split in May.

All Herbalife's regions grew in the quarter except China, which was flat at $51.4 million as the country's distributors transition their sales to a daily consumption model, Herbalife execs said during an Aug. 2 earnings call. The Los Angeles company is rolling out a soft launch for its seven-product Herbalife24 sports nutrition line, which it hopes will attract new distributors globally ( (Also see "New Products In Brief" - Pink Sheet, 18 Jul, 2011.), New Products In Brief).

Prestige sees results of amplified A&P

Advertising and promotion expenses grew 36.7% in Prestige Brands' first quarter of its fiscal 2012, helping net sales expand 33.7% to $94.3 million. Though much of that growth came from the Blacksmith Brands and Dramamine acquisitions, the company said Aug. 4 its five core legacy OTC brands, including Clear Eyes and Chloraseptic, also gained 10.7% in the April-June period. However, organic growth was flat overall, as Prestige's household brand revenues dipped 9.1%. First-quarter net income climbed 60.4% to $14.8 million. CEO Matt Mannelly said during an earnings call the Irvington, N.Y., firm is trying to widen profit margins for the Blacksmith products, which historically had lower margins compared to other Prestige OTCs. The company recently launched line extensions for PediaCare and Luden's.

DSM Nutrition enjoys Martek boost

Royal DSM N.V. saw its nutrition business grow 10% to $1.2 billion (€839 million under the Aug. 2 exchange rate), thanks to $120.5 million in sales from omega-3 oils subsidiary Martek Biosciences. The Martek acquisition closed in the first quarter and integration is on track, DSM said. Nutrition's organic growth was 5%, hurt by currency exchange and higher material costs. The Dutch firm said the nutrition unit generated second-quarter earnings before interest, taxes, depreciation and amortization of $277 million, up 2.7%, though EBITDA margin declined 1.6 percentage points to 23%. DSM is raising prices to maintain margins ( (Also see "Sales & Earnings In Brief" - Pink Sheet, 2 May, 2011.), Sales & Earnings In Brief). Overall, DSM net sales increased 6.8% to $3.25 billion in the quarter and net profit rose 163.1% to $562.5 million, including one-time proceeds from selling shares in Danisco, now part of DuPont.

Danisco contributes to DuPont nutrition

The chemical company's nutrition and health business increases second-quarter sales 64% to $486 million, reflecting 6 percentage points of organic growth and the rest attributable to its Danisco subsidiary acquired in May. DuPont nutrition and health, which also includes the Solae soy ingredient unit, generated pre-tax operating income of $38 million in the April-June period, a 138% gain, the Wilmington, Del., firm reported July 28. First-half nutrition and health sales totaled $810 million, and DuPont projects second-half sales between $1.6 billion and $1.7 billion for the business, with ongoing growth expected in the high single-digits.

C&D ekes out gains in tough environment

CEO Jim Craigie warns 2011 looks like "a very challenging year" due to weak consumer demand, rising commodity prices and ongoing retail price wars, though Church & Dwight managed to grow net sales 5.3% to $674.9 million in the second quarter and 3.3% to $1.32 billion in the half. Net income was $82.6 million in the quarter and $166.2 million in the half, respective increases of 11.2% and 7.7%, the company reported Aug. 4. C&D's international consumer products business grew 12.4% in the quarter ended July 1, while personal care products were flat. Craigie announced new launches, including the Arm & Hammer ToothTunes music-playing toothbrush and the Simply Saline Neti Pot, which he said are high-margin products. Still, price wars forced the Princeton, N.J., firm to lower its 2011 gross margin improvement goal by 50 basis points.

North Asia market delivers for Nu Skin

Effects of currency exchange contribute 11 percentage points to Nu Skin Enterprises' 11.6% growth in North Asia, which reached sales of $183.1 million in the second quarter. The multi-level marketer's second-largest market, Greater China, saw sales dip 1.5% to $79.4 million, attributable to year-ago ageLOC product launches. Overall, Nu Skin reported total revenue of $424.4 million in the quarter ended June 30, up 9.3%. With a gross margin of 83.2%, up 70 basis points thanks to currency exchange and supply chain efficiencies, net income climbed 28.7% to $41.7 million in the quarter. A Japanese customs ruling shaved $32.8 million off Nu Skin's first-half income, which decreased 10.1% to $57 million. Though diluted earnings per share were 89 cents in the half, CEO Truman Hunt said Aug. 2 Nu Skin is "ahead of schedule" to reach its EPS goal of $4 by 2015.

Nutraceutical picks up skin care brand

Nutraceutical International Corp. continues using operating cash flow to add supplements and personal care products to its portfolio. The Park City, Utah-based firm said it acquired Skin by Ann Webb in May and purchased three other companies over the past nine months, totaling $9.3 million in acquisition costs. Nutraceutical's strategy involves "consolidating the fragmented industry in which it competes," according to a Securities and Exchange Commission filing. On July 28, the firm reported third-quarter net sales of $47.5 million, up 6.7%, with net income of $3.9 million, a 4% gain.

Severance costs add to Mannatech net loss

Mannatech's net loss expands 37.6% to $5.3 million in the second quarter and 52% to $10 million in the first half, as the nutritional products direct-seller paid out severance related to job eliminations and absorbed the costs of its recent launch in Mexico ( (Also see "In Brief" - Pink Sheet, 4 Jul, 2011.), In Brief). The Coppell, Texas, firm said Aug. 4 net sales declined 10.8% to $51.4 million in the April-June period, and sales were down in almost all markets. South Korea was the most notable exception, with sales growth of 8.8% to $6.2 million. However, in the U.S., Mannatech's largest market, sales contracted 18.1% to $21.3 million. Mannatech entered the Czech Republic, Estonia, Finland and Ireland in June.

Omega Protein rises with fish oil prices

The Houston-based omega-3 fish oil producer says a 47% increase in fish oil prices helped spike its second-quarter revenue 21.9% to $44.2 million. Omega Protein said Aug. 3 higher fishmeal sales and the addition of recently acquired ingredients supplier Cyvex Nutrition also boosted the top line (Also see "DuPont Gains Broader Nutritional Portfolio In $5.8B Danisco Deal" - Pink Sheet, 17 Jan, 2011.). Net income in the three months ended June 30 was $22.9 million, compared to $2 million in the year-ago period; the large gain was attributable to a final $26.2 million payment from the Gulf Coast Claims Facility, in connection with lost business Omega Protein incurred following last year's Deepwater Horizon oil spill.

Nature's Sunshine pares SG&A expenses

Though net sales increased 5.4% to $91.8 million in the second quarter, the Provo, Utah, company's net income from continuing operations grew three-fold to $5.6 million, thanks in part to lower selling, general and administrative expenses, Nature's Sunshine Products reports Aug. 3. The multi-level marketer of nutritionals continued benefiting from the strong performance of its Synergy Worldwide subsidiary – up 38% to $22.9 million – while sales from its NSP domestic and international units contracted ( (Also see "Sales & Earnings In Brief" - Pink Sheet, 23 May, 2011.), Sales & Earnings In Brief). Nature's Sunshine also announced a settlement deal with NutriPlus, which NSP will pay $21.7 million; the firms originally came together for an asset purchase and royalty payment agreement in 2000 as part of NSP's expansion into Russia.