Herbalife Ltd. Herbalife (HLF) shares are trading higher Tuesday after the health and wellness company unveiled a fresh $250 million stock buyback program.
The company's board authorized the repurchase of up to $250 million of its outstanding common stock over the next three years. In a statement, Herbalife framed the move as a sign of confidence in its business strategy, financial outlook, and ability to keep generating solid free cash flow.
Chief Financial Officer John DeSimone put it this way: "We believe our strong financial profile and free cash flow generation provide us with significant flexibility to invest in the business, maintain a strong balance sheet and return capital to shareholders."
DeSimone, who is set to become interim CEO, also noted that the company views its shares as attractively valued at current levels. That makes buybacks a potentially smart way to boost long-term shareholder returns, he said.
Of course, the company isn't putting all its eggs in the buyback basket. It plans to balance repurchases with investments in organic growth, strategic opportunities, and maintaining financial flexibility.
The mechanics are pretty standard: Herbalife can buy shares through open-market transactions, privately negotiated deals, or accelerated share repurchase agreements. But here's the fine print — the authorization doesn't obligate the company to buy a single share. It can also suspend, modify, or scrap the program whenever it wants.
In addition to the buyback news, Herbalife is participating in the Barclays Global Consumer Conference on Sept. 8 and Sept. 9. DeSimone, incoming CFO Scott Schaefer, and investor relations head Samantha Holway are scheduled for a fireside chat on Sept. 9 at 7:30 a.m. ET.
As for the market's reaction, Herbalife shares were up 2.67% at $12.71 at the time of publication Tuesday.
