Herbalife stock climbs 5% on $250M buyback plan

Herbalife Ltd. (NYSE:HLF) shares rallied 5% on Tuesday after its Board of Directors authorized a new $250 million share repurchase program.

The repurchase initiative is set to run for three years and permits the company to buy back outstanding common shares through open-market purchases, privately negotiated transactions and accelerated share repurchase agreements.

The company said the authorization reflects confidence in its business strategy, financial outlook and ability to generate sustainable free cash flow.

John DeSimone, the company's Chief Financial Officer, said its strong financial profile and free cash flow generation give it significant flexibility to invest in the business, maintain a solid balance sheet and return capital to shareholders.

DeSimone went on to say that, with confidence in the long-term outlook and the present market value of the shares, buying back stock represents an attractive deployment of capital and a path to stronger long-term shareholder returns.

Herbalife said it intends to stick with a balanced capital allocation strategy centered on investing in organic growth initiatives, pursuing strategic opportunities, preserving financial flexibility and returning excess capital to shareholders.

The exact timing, method and scale of buybacks will hinge on multiple considerations, including market conditions, the share price, available liquidity and alternative uses of capital. Herbalife is not obligated to repurchase any particular number of shares, and the program can be suspended, changed or ended at any time.

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