Herbalife claims sales slide all but over

Herbalife’s global net sales fell 5.7% in its second quarter 2023 over the same period a year ago, the multi-level marketing giant reported Tuesday. 

The company’s report showed worldwide sales of $1.31 billion in the quarter, down from $1.39 billion in the second quarter of 2022. 

The Los Angeles-based MLM (multi-level marketer) sells a variety of dietary supplements and functional foods. It is the world’s largest network marketing company devoted solely to the sale of nutritional products, according to industry publication Direct Selling News. It ranks No. 3 overall behind Amway and Brazilian firm Natura. 

According to the earnings report, sales fell on a constant currency basis in nearly all the regions that Herbalife services. The exception was EMEA (Europe, Middle East and Africa), where sales rose a modest 2.2%. 

Volumes fell across all of Herbalife’s regions, from a 6.7% decline in EMEA to a more than 21% decrease in North America. 

Herbalife’s sales have been falling for several years.  In fiscal 2021, the company recorded net sales of $5.8 billion, which decreased to $5.2 billion in 2022. 

However, in a statement that accompanied the earnings release, company executives highlighted the positives within that trend. The sales swoon is slowing, they maintain, and they are forecasting a quick return to growth. 

Related:Herbalife to pay $12.5 million to settle class action suit over event costs

Renewed events, new products, digital initiative to boost growth 

CEO Michael Johnson emphasized the renewed large sale in-person events the company conducted during the quarter in China, India and Singapore. Most MLMs rely on such meetings to energize the sales base and recruit new distributors. 

“We expect this high-level of engagement and strong momentum to continue, driving our return to growth by the end of 2023,” Johnson said. 

In addition, the company has highlighted the investments it has made in a new online sales and engagement platform known as Herbalife One.   

The initiative was announced in December of last year, with an overall $400 million outlay foreseen.  

In an earnings call with analysts, Johnson highlighted new product launches, including a ready-to-drink red ginseng product in South Korea and a line of vegan products in the U.S. Dubbed Herbalife V, the line includes five plant-based products, including two protein shakes, a greens booster, a digestive support and immune support product.  

A transcript of the call was posted on the site Seeking Alpha. 

Stock price still suffering 

Stock traders seemed to greet the earnings release in a positive light. Herbalife shares were trading at a bit more than $16 a share before the earnings were released and rose to $18.75 today.   

However, the company’s stock price is down almost 33% in the past year, from a high of more than $30 a share in August 2022. And it’s down even more from the company’s all-time high of more than $60 a share in February 2018.