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More bad news for Bill Ackman.

Herbalife shares climbed higher in extended trading on Thursday after the the nutrition drinks marketing business lifted its full-year earnings outlook.

The Los Angeles-based company said it expects to earn between $4.05 to $4.45 a share in fiscal 2017, compared with its previous projections of earnings between $3.65 to $4.05 a share. However its outlook for EPS of 85 cents to $1.05 a share in the current quarter was shy of Wall Street forecasts of $1.09.

The company, which has since December 2012 seen Mr Ackman’s Pershing Square hedge fund allege that it is a pyramid scheme, also reported better-than-expected first quarter results.

Profits slid to $85.2m or 98 cents a share in the three months ended in March, compared with $95.8m or $1.12 a share in the year-ago period. That topped analysts’ estimates of 75 cents. Adjusting for one-time items, earnings of $1.24 a share topped expectations of 89 cents.

Worldwide net sales fell 1.5 per cent from a year ago to $1.1bn, compared with estimates of $1.04bn. Excluding currency impacts, net sales declined in North America, Asia Pacific and South and Central America, while growing in China, Mexico and EMEA.

“Healthy living is a growing aspiration for more and more consumers worldwide and we are well positioned to capitalize on this trend,” outgoing chief executive, Michael Johnson, said. “We offer a powerful person-to-person alternative to traditional retail, where consumers give our distributors permission to help them with our extensive range of nutrition products.”

Last year, Herbalife reached a $200m settlement with the US Federal Trade Commission after an investigation into the group’s practices. While the FTC did not accept Mr Ackman’s claims that the company is a pyramid scheme, it did order changes to Herbalife’s practices.

Herbalife shares, which have rallied more than 29 per cent so far this year, rose 6 per cent in after-hours trade.

Copyright The Financial Times Limited 2018. All rights reserved.

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