Herbalife Ltd. (HLF): A Changing Message To Distributors? – ValueWalk Premium

Herbalife Ltd. (HLF): A Changing Message To Distributors?

Herbalife Ltd. (NYSE:HLF) changing their messaging? Both the distributors and Carl Icahn seem confused. We look at the evolving Herbalife message and specifically look at comments which Carl Icahn has made.

Herbalife Ltd. (NYSE:HLF) used to stress that it was a job opportunity and that it has many customers outside of its distributor network. During the past year they have changed their messaging and have said that most distributors sign up to get a product discount.

Herbalife Ltd. (HLF): A Changing Message To Distributors?

herbalife Ltd. HLF

  • ·         “Discount buyers […] have signed signed up as distributors to enjoy a discount on their purchases […] were approximately 47%. [HLF 10-K for 2010]


  • ·         “Discount buyers […] have signed signed up as distributors to enjoy a discount on their purchases […] were approximately 29%.” [HLF 10-K for 2011]


  • ·         According to Herbalife Ltd. (NYSE:HLF) ’s 8-K Form Filing in May, 2012, “discount buyers were 27 percent (distributors who receive a 25 percent discount)” [HLF 8-K for 2012]


  • ·         Kate Kelly: “Can you give us a percentage figure though, Mr. Johnson, as to what percentage of your sales are outside that distribution network?” //Michael Johnson: “90%.” //Kate Kelly: “So the vast majority?” //Michael Johnson: “Absolutely.” [Michael Johnson on CNBC 12.19.12]


  • ·         “Our distributors are club members, just like Costco…” [Des Walsh on CNBC 1.10.2013]


  • ·         Referring to his previous “90%” figure, “It was a misstatement.”/ “90% buy for one reason…self-consumption.”[Michael Johnson on CNBC 1.10.13]


  • ·         Herbalife just launched a new website (iamherbalife.com) which says “Most members join simply to receive a discount on products they consume; some join to make part-time income as well, and a small percentage join in search of full-time income.”


Herbalife Ltd. (NYSE:HLF) is changing its story so frequently that even its biggest shareholder is confused about whether it’s a job opportunity or a discount club.


  • ·         Carl Icahn to NY Post: “I believe it’s a great business model, and a lot of people depend on the money they earn from Herbalife.  It would hurt a lot of poor people if Herbalife went out of business.”  [New York Post, 3/25/14]


  • ·         Carl Icahn to Fox Business: “The irony is that Ackman has this mantle, he’s saving Hispanic people.  He’s hurting them because a lot of Hispanic people, women that can’t get jobs, are making money from this and not illegally and not wrongly.”  [Fox Business, 3/24/14]


  • ·         Carl Icahn to CNBC: “Actually the irony is that Herbalife gives people that are unemployed work.  They take, you know a minority group, say you talk about the Spanish, whatever.  And I think there are a lot of people that are unemployed, that can’t get jobs.  I mean, women with a family, with babies, single mothers, and they go sell this product and they make money from it. … And it employs a lot of people.”  [CNBC, 3/25/14]

See a great clip on this topic from Herb Greenberg below

Comments (4)

  • nadowalk

    There is no confusion for Mr Ichan He is tottaly right on his statements.and for the leaders interviews and the “K” forms number change for distributors who do better or stop doing as a part time or full time business. But most important is the consumption of the products that one way or another people love taking them every single day 365 days of the year.

    March 26, 2014 at 10:07 pm
  • Rene E Porcile

    No confusion with my team – HLF is an opportunity, a sales commissioned opportunity. Its not a job and its not welfare. HLF paid 330,000 Latino distributors in USA $180 million in one calendar year. How much opportunity has Ackman created for Latinos in $$$ anywhere in the world??? Answer = ZERO!

    March 26, 2014 at 11:03 pm
    • Dave Ritchie


      Have you done the math on your numbers? My calculator says that according to your data, the average gross receipts for Latino distributors that year was $545.45 or a monthly gross of $45.45. Without access to your complete data set, I’d estimate that the median annual gross was down to two figures, if that much. Unless the cost to those distributors of doing business averaged less than $45.45/month, they lost money.

      During that same period, how much revenue did Herbalife rake in from its Latino customer base?

      IMO, if Ackman is right and the FTC shuts Herbalife down, only the top less than 1% of distributors, Herbalife execs, the corporation and Icahn and his pals are the only stakeholders who will actually lose money; and Ackman and every unpopular anti-MLMer out here will have in effect, put money back into everyone else’s pockets.

      March 29, 2014 at 7:21 pm
  • Barbara

    It’s a scam, a pyramid scheme, designed to separate the poor from their money and send it up line to the billionaires like Johnson and Walsh. And the products are overpriced crap filled with sugar and palm oil.

    November 24, 2014 at 11:22 am


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