Shares of Herbalife (HLF) plummeted 7.57% in pre-market trading on Thursday, as investors reacted to the company's mixed first-quarter earnings report and a target price cut by Citigroup. The global nutrition company's stock faced significant pressure after Citigroup lowered its price target to $11 from $13, while maintaining a Buy rating on the shares.

Herbalife's Q1 2025 results painted a complex picture of the company's performance. Net sales declined 3.4% year-over-year to $1.2 billion, although they increased 1.4% on a constant currency basis. The company reported an adjusted EBITDA of $165 million, surpassing its guidance range of $140 million to $150 million. Notably, Herbalife achieved a significant milestone by reducing its total leverage ratio to 3 times, nine months ahead of schedule. However, regional performance varied, with Latin America showing strong growth of 11% in local currency, while China experienced a 14% decline in net sales.

Despite some positive indicators, such as a 16% year-over-year increase in new distributors and strategic acquisitions to enhance product offerings, Herbalife faces ongoing challenges. The company continues to grapple with foreign exchange headwinds, which are expected to impact financial results throughout 2025. Additionally, low conversion rates at US Nutrition Clubs and declining sales in key markets like North America and China remain concerns for investors. As Herbalife navigates these challenges and implements new initiatives like the Pro2col platform, market participants will be closely watching for signs of sustainable growth and improved financial performance in the coming quarters.