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Herbalife Reports Q4 and Full Year 2021 Results

Feb. 24, 2022

Herbalife is a significant seller of meal replacements and weight management products such as shakes and nutrition bars, as well as appetite suppressants. It is one of the few public MLM companies for which we can obtain actual sales (along with Glanbia and Nu-Skin).

The North America region reported net sales of $1,428.9 million for the year ended December 31, 2021. Net sales increased $56.0 million, or 4.1%, for the year ended December 31, 2021 as compared to the same period in 2020. The number of active Nutrition Clubs in the region has continued to grow.

North American sales, at $1.428 billion, accounted for 24.6% of total Herbalife sales. If we apply that 24.6% geographic share to the $1.428 billion, then estimated North American weight management product sales amounted to $829 million in 2021. This figure exceeds the estimated revenues of both Jenny Craig and NutriSystem.

“…Additionally, we believe that pandemic conditions may have been a contributing factor in the motivation and focus of our members during the second half of 2020 and the first half of 2021, contributing to year-over-year sales volume increases for the first half of 2021.

Effects of the Pandemic

“…In response to the pandemic conditions, product distribution to our members was temporarily altered during 2020 to allow online and phone-in orders only. Currently, two of our three major U.S. distribution centers are shipping product only, with no in-person pick-ups permitted, and our sales centers are for pick-up only, with no orders taken on-site; however, our members’ ability to obtain product has not materially decreased. Our access points, including distribution centers and sales centers, generally allow in-person pick-up orders, with exceptions as local conditions warrant; however, our access points generally continue to not allow in-person orders.”

“…Members’ Nutrition Clubs, which represent a major DMO for the region, are operating in some areas as pick-up points for product only, and returning to traditional on-site consumption approach as local conditions allow. Nutrition Club sales volume increased for 2021 versus 2020, including the impact of home deliveries from Nutrition Clubs to their customers, an approach that has seen increased use as a response to the pandemic.”

Marketdata/DietBusinessWatch Commentary

Herbalife’s 2021 North American weight loss sales were down slightly from 2020 levels. However, the fact that these sales at $829 million exceed both Jenny Craig and NutriSystem, major competitors in the U.S. weight loss market, is telling. it shows just how potent the MLM model is in the market. Herbalife’s sales did not grow as fast as Medifast sales probably due to the fact that they rely more on in-person delivery of products to clients via the nutrition clubs, whereas Medifast ships products directly to the customer’s home. This delivery model was constrained by the pandemic.

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