Japan Woes Still Hamper Herbalife

Japan Woes Still Hamper Herbalife

LOS ANGELES--Decent growth in the Americas and Europe was not enough to save Herbalife International(NASDAQ:HERBA) from decreases for its second quarter ended June 30, as Japan sales continued to slump. Total retail sales declined 6 percent to $413.4 million, and net sales also declined 6 percent to $255.0 million, compared to the second quarter last year. Gross margin held relatively steady around 40.5 percent of sales, but operating sales inched up one point to 34.5 percent of sales, compared to a year ago. Net income fell to $10.0 million or $.34 per basic share from $11.7 million or $.41 per basic share earned in the same quarter last year.

The company attributed the sales decline to foreign currency fluctuations. Nevertheless, sales in Asia/Pacific Rim slid 24 percent to $135.8 million, while sales to the Americas rose 5 percent and sales to Europe rose by more than 7 percent. Markets in Japan and India were responsible for the depressed Asian sales, with a sluggish Japanese economy a major factor. Also, initial huge sales gains in India tapered off during the quarter, amounting to an almost 88-percent sales decrease compared to a year ago.