Herbalife Ltd. (NYSE:HLF) today released the results of a study
conducted to determine the penetration of Herbalife distributors
and end users in the U.S. Herbalife engaged Nielsen, a leading
global provider of information and insights into what consumers
watch and buy, to conduct the research.
Conducted online during April and May of 2013, the survey was
completed without intervention from Herbalife and the Company’s
sponsorship was not disclosed. The survey was conducted among a
nationally representative sample of entirely adults, aged 18 and
over in the U.S., and balanced by key demographic indicators from
the U.S. census, including age, gender, race, personal income and
geographic region. With a sample size of 10,525 consumers, the
survey had a margin of error of +/- 0.96%.
According to the research, 3.3% of the general population
reported that they had purchased Herbalife products within the past
three months, indicating that Herbalife currently has approximately
7.9 million customers when projected to the total U.S. adult
population. Herbalife customers would include their distributor
network, which totaled approximately 550,000 in the U.S. as of the
end of the first quarter 2013.1
“This survey, conducted by one of the world’s most respected
research organizations, confirms what we at Herbalife already know
to be true: that Herbalife’s products have a broad consumer base
here in the U.S. – nearly 8 million in the last three months – and
that the majority of individuals that purchase Herbalife products
do so for personal consumption,”1 stated Michael O. Johnson,
Herbalife's chairman and CEO. “Many of the national polls sponsored
by major news organizations during the recent presidential election
relied on sample sizes of 800 to 1,000 participants. Importantly,
in this research, the sample size of more than 10,000 consumers and
the corresponding very low margin of error give this survey strong
credibility. Throughout our 33-year history, Herbalife has been
committed to having a positive impact on the lives and health of
our consumers while addressing global public health concerns:
weight management and nutrition. We look forward to continuing to
create meaningful results and value for all Herbalife
stakeholders.”
Additional findings from the market research include2:
- Past three month purchasers also claim
to purchase Herbalife at a mean rate of every 2.2 months.
- Weight Management is the most commonly
purchased type of Herbalife product for personal use, with 95
percent of past three month Herbalife purchasers claiming to have
bought this type of product.
Johnson concluded, “We believe the results of this study
substantiate our belief that many of those who attack our model
lack a clear understanding of the direct selling industry, and
Herbalife in particular. Meanwhile, Herbalife continues to deliver
record results in sales and profitability as our independent
distributors go deeper into existing markets, developing more
customers using our nutrition products every day.”
Herbalife Names Vice President of Consumer & Distributor
Insights
Herbalife also announced today that it has appointed Monica Wood
as Vice President, Consumer & Distributor Insights. In this
role, Ms. Wood will help advance Herbalife’s commitment to ongoing,
in-depth market research.
Ms. Wood joins Herbalife from MWA, LLC, where she was an advisor
to research agencies and corporate departments across the financial
services, pharmaceutical and consumer sectors to develop
best-in-class practices, training programs and consultancy skills
across marketing research, consumer insights and data analytics.
Prior to her role at MWA, LLC, from 2005 to 2009 Ms. Wood held a
number of marketing and research positions at Novartis
International AG, a Swiss multinational pharmaceutical company,
which ranked number two in sales among the worldwide industry in
2010. Ms. Wood most recently held the position Vice President of
Global Marketing Services at the company from 2007 to 2009. Earlier
in her career, Ms. Wood also held consumer insights, commercial
analytics and strategic planning positions at Toys “R” Us, Inc.,
Edelman Public Relations, Wyeth and the Campbell Soup Company.
Ms. Wood received a BS in Education from the University of
Florida, and an MBA in Marketing from the University of Miami
(Florida).
About Herbalife Ltd.
Herbalife Ltd. (NYSE:HLF) is a global nutrition company that
sells weight-management, nutrition, and personal care products
intended to support a healthy lifestyle. Herbalife products are
sold in over 80 countries through and to a network of independent
distributors. The company supports the Herbalife Family Foundation
and its Casa Herbalife program to help bring good nutrition to
children. Herbalife's website contains a significant amount of
information about Herbalife, including financial and other
information for investors at http://ir.Herbalife.com. The company
encourages investors to visit its website from time to time, as
information is updated and new information is posted.
FORWARD-LOOKING STATEMENTS
Although we believe that the expectations reflected in any of
our forward-looking statements are reasonable, actual results could
differ materially from those projected or assumed in any of our
forward-looking statements. Our future financial condition and
results of operations, as well as any forward-looking statements,
are subject to change and to inherent risks and uncertainties, such
as those disclosed or incorporated by reference in our filings with
the Securities and Exchange Commission. Important factors that
could cause our actual results, performance and achievements, or
industry results to differ materially from estimates or projections
contained in our forward-looking statements include, among others,
the following:
• the resignation of our former independent registered public
accounting firm, its withdrawal of its audit reports with respect
to certain of our historical financial statements, and any
difficulties we encounter engaging a successor accounting firm;
• any collateral impact resulting from the ongoing worldwide
financial environment including the availability of liquidity to
us, our customers and our suppliers or the willingness of our
customers to purchase products in a difficult economic
environment;
• our relationship with, and our ability to influence the
actions of, our distributors;
• improper action by our employees or distributors in violation
of applicable law;
• adverse publicity associated with our products or network
marketing organization, including our ability to comfort the
marketplace and regulators regarding our compliance with applicable
laws;
• changing consumer preferences and demands;
• our reliance upon, or the loss or departure of any member of,
our senior management team which could negatively impact our
distributor relations and operating results;
• the competitive nature of our business;
• regulatory matters governing our products, including potential
governmental or regulatory actions concerning the safety or
efficacy of our products and network marketing program, including
the direct selling market in which we operate;
• legal challenges to our network marketing program;
• risks associated with operating internationally and the effect
of economic factors, including foreign exchange, inflation,
disruptions or conflicts with our third party importers, pricing
and currency devaluation risks, especially in countries such as
Venezuela;
• uncertainties relating to the application of transfer pricing,
duties, value added taxes, and other tax regulations, and changes
thereto;
• uncertainties relating to interpretation and enforcement of
legislation in China governing direct selling;
• our inability to obtain the necessary licenses to expand our
direct selling business in China;
• adverse changes in the Chinese economy, Chinese legal system
or Chinese governmental policies;
• our dependence on increased penetration of existing
markets;
• contractual limitations on our ability to expand our
business;
• our reliance on our information technology infrastructure and
outside manufacturers;
• the sufficiency of trademarks and other intellectual property
rights;
• product concentration;
• changes in tax laws, treaties or regulations, or their
interpretation;
• taxation relating to our distributors;
• product liability claims;
• whether we will purchase any of our shares in the open markets
or otherwise; and
• share price volatility related to, among other things,
speculative trading and certain traders shorting our common
shares.
We do not undertake any obligation to update or release any
revisions to any forward-looking statement or to report any events
or circumstances after the date hereof or to reflect the occurrence
of unanticipated events, except as required by law.
1 The Nielsen study found that 87 percent of the 349 respondents
(out of 10,525 total respondents) who purchased Herbalife products
for personal use in the past three months self-reported that they
did not purchase it from the company as a distributor.
2 Data collected among 349 respondents (out of 10,525 total
respondents) who claim to have purchased Herbalife products for
personal use in the past three months.
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