Herbalife sees sales growth as people become conscious of their health and wellness, according to the company CEO Dr. John Agwunobi.
“A lot of people around the world are waking up to the notion that health is wealth, and they’re spending the time to live healthy, balanced lives,” Agwunobi said on “Closing Bell.” “And they’re looking for companies like ours that can supply them with healthy nutrition.”
Earlier in August, the nutritional supplement company recorded an 8.6% increase in net sales to $1.3 billion during the second quarter, compared with the same period in 2019.
“Our business had a strategy that was working really well before coronavirus hit. Our products were selling really well before the pandemic hit,” said Agwunobi.
Agwunobi’s statements come as the coronavirus pandemic compelled people to take their health and wellness seriously. In the US, lockdowns forced people to stay at home and find other ways to remain healthy and active.
A TD Ameritrade survey suggested that people may not choose to return to gyms and seek "more affordable" ways to remain fit.
Meanwhile, some believe that the pandemic has heightened the importance of fitness in helping fight conditions such as cardiovascular disease and obesity. The Centers for Disease Control and Prevention said that certain existing medical conditions can lead to a greater risk of severe illness from Covid-19.
“If you think about it, gyms are really a part of the health-care delivery system, and to shut us down is conterproductive,” Planet Fitness CEO Chris Rondeau told CNBC last month. “We really are part of the solution, not the problem.”
A source of income
Agwunobi, former assistant secretary for health at the Department of Health and Human Services under former President George W. Bush, confirmed that Herbalife witnessed increased demand from people who want to resell its items during the pandemic, which also devastated economies.
“A number of individuals, they’re sitting at home, they’re working on their computers and they’re realizing that there may be another way to add an additional income stream,” said Agwunobi, who also is a former Walmart executive, serving as president of health and wellness for the retailer. “So we are finding that many people are coming into the business with a view to helping develop their own income streams.”
After its multilevel marketing strategy became under scrutiny, Herbalife was required to restructure its business operations in the US. This is part of a $200 million settlement in 2016 with the Federal Trade Commission.
“Our challenges of the past are behind us,” said Agwunobi, who became CEO earlier this year. “Our future is so bright.”
Carl Icahn’s eponymous firm reported earlier this month it had sold around 14.7 million shares of Herbalife as part of the nutrition company’s self-tender offer. Icahn Enterprises is the largest shareholder of the company, with about 15.5% of outstanding shares.
Asked whether Icahn’s stock sales are affecting the way the company shapes its strategy, Agwunobi said, “not at all.” He noted that Icahn has “always expressed his support for the leadership and the strategy that we have in place.”
