Mexico Problems Cause MLM Company Herbalife Shares To Plunge
A 24% plunge in MLM company Herbalife Ltd.'s stock Friday, after the supplement maker's announcement that it expected slower sales growth in Mexico, illustrates the rising importance of foreign markets to the bottom line of U.S. direct-sales companies.
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The company said several Mexican distributors were breaking its rules by selling products in smaller-than-authorized quantities or advertising themselves as retailers. The supplements can be sold only in arranged group settings or by referral. Herbalife blamed rushed training for the problems.
The troubles in Mexico, which also included counterfeit products and unregistered sellers, caused Herbalife to downgrade its 2007 growth forecast to 6% to 10% from a previous forecast of 10% to 15%.
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The company said several Mexican distributors were breaking its rules by selling products in smaller-than-authorized quantities or advertising themselves as retailers. The supplements can be sold only in arranged group settings or by referral. Herbalife blamed rushed training for the problems.
The troubles in Mexico, which also included counterfeit products and unregistered sellers, caused Herbalife to downgrade its 2007 growth forecast to 6% to 10% from a previous forecast of 10% to 15%.
posted by the MLM News Desk at
12:46 AM
