Herbalife's China 'Issue' Doesn’t Stop Inside The Country
While China's scrutiny of promotions slows sales across health product space, Herbalife isn't downplaying a potential impact of SEC and DoJ investigations concerning its compliance in China with requirements of Foreign Corrupt Practices Act and its marketing in the countries. It says US agencies' investigations could reach "materially adverse" conclusions.
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Herbalife Q4 net sales up 15.6% to $1.4bn, a company record for the period, and full-year net sales increased 13.6% as its Asia Pacific, Europe-Middle East-Africa and North America regions reached annual net sales records. USANA reports 5.4% Q4 sales growth in China as full-year sales grew 7% to $1.135bn.
Direct seller pays fines in settlements with SEC and DoJ on bribery and other charges but two former executives for its operations in China still face criminal charges alleging violations of the Foreign Corrupt Practices Act. They have not been arrested and have remained at large since being charged in November 2019.
"We're a growth company, well-positioned in a global trend of nutrition that the world hasn't seen before," says co-president John Agwunobi. But the direct seller's record volume increase in 2019 didn’t translate to revenue growth as China, Mexico and Central and South America pulled down results.