Herbalife lifts profit forecast amid Ackman, Ichan battling

Herbalife Ltd., the nutrition company at the centre of a battle between hedge-fund managers Bill Ackman and Carl Icahn, raised its 2013 earnings forecast as first-quarter profit topped analysts’ estimates.

Profit this year will rise to as much as US$4.80 a share, up from a previous forecast of US$4.65, the Cayman Islandsbased firm said Tuesday. Excluding some items, first-quarter profit was US$1.27 a share, topping analysts’ projections of US$1.06, the average of seven estimates compiled by Bloomberg.

Herbalife has fought accusations from Mr. Ackman, founder of New York hedge fund Pershing Square Capital Management LP, that it is a pyramid scheme. The company has repeatedly denied the allegations, saying it derives its profits from the sale of unique products. Shareholders have added two directors associated with Mr. Icahn, who has come to Herbalife’s defence.

“Not only did they beat on earnings but they beat them substantially and they guided up for the year,” David Simon, chief executive of New York hedge fund Twin Capital Management LLC, said Tuesday. “This is a growth company growing over 15% a year. People like the product, people are buying the product.”

Twin Capital has a long position in Herbalife, Mr. Simon said, declining to disclose the amount of shares held.

Herbalife shares rose 2.5% to US$39.71 at the close in New York. They’ve advanced 21% this year, compared with a 12% gain for the Standard & Poor’s 500 index. Net income increased 9.9% to US$118.9-million, or US$1.10 a share, from a year earlier, the company said.

Fluctuating currencies will hurt per-share earnings in the last three quarters of the year by US7¢, chief financial John Desimone said in an interview.

Worldwide net sales rose 17% to US$1.12-billion, according to the statement. Analysts estimated US$1.09billion. Hudson’s Bay Co. will open stores-within-a-store for Tommy Hilfiger Corp. as the department store chain increases its assortment of the U.S. sportswear brand across Canada, the companies announced Tuesday. The retailer has carried Tommy Hilfiger’s menswear since 2011, and has just added women’s sportswear. Hudson’s Bay, which has 90 stores across Canada, is opening 59 new “shop-in-shops” at locations and will extend the deal to 17 more this fall. The remainder of stores will be outfitted with the Hilfiger boutiques next year. “Our strategic alliance with Hudson’s Bay for Tommy Hilfiger menswear has served our business very well, and we’re excited to be expanding the partnership,” said Gary Sheinbaum, chief executive of Tommy Hilfiger North America, a division of PVH Corp. Hudson’s Bay chief executive Richard Baker said management viewed its large department stores much like a mall to be filled with an assortment of key brands. As well, HBC is rolling out in-store boutiques for popular U.K. chain Topshop and will launch Canada’s first outlet of Kleinfeld Bridal, a feature boutique on the TV show Yes to the Dress, in Toronto in 2014. Canada’s broadcast regulator said Tuesday it approved Rogers Communications Inc.’ s acquisition of Score Media Inc. The companies had been waiting for the go-ahead from the Canadian Radio-television and Telecommunications Commission since the deal closed in October. Although it now has regulator approval for the transaction itself, which the CRTC valued at $172-million, Rogers will have to take another crack at the so-called tangible benefits associated with the deal. When companies transfer ownership of broadcasting businesses, the CRTC requires the purchaser to make contributions — generally worth 10% of the value of the transaction — to communities served by the broadcaster and the broadcasting system as a whole. Rogers proposed to direct the benefits in this case (worth about $17-million) to digital media production scholarships (15%), a fund for the development of independent production of amateur sports programming (27%) and its own Sportsnet Winter Games, an annual amateur action sports event (58%).