Herbalife Ltd. (NYSE: HLF) shares have had charmed 2017 thus far, having gained 18.82 percent for the year-to-date period. However, the gains have come after the steep selloff in the second half of last year.
The nutritional supplement maker's fourth quarter results released Thursday haven't gone down well with the investors, with the stock falling over 4 percent.
The fourth quarter earnings report revealed adjusted earnings per share of $1 on revenues of $1.05 billion, with volume point declining 1 percent. In terms of regions, the EMEA region showed volume point and net sales growth of 5 percent each.
However, South & Central America (11.6 percent of total revenues) and China (18.6 percent of total revenues) were sore spots.
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Even as China was a disappointment, Herbalife announced a joint venture with traditional Chinese medicine, or TCM, health products company Tasly Holdings.
Tasly, founded in 1994, is based in Tianjin, China. Tasly's business includes modern TCM, chemical medicine, bio-pharmaceuticals, and high-quality consumer health products. Tasly has created an industrialized platform for manufacturing, while it owns an extensively marketed product line and pipeline, supported by strong patent portfolio. The company boasts of more than 1,000 patents.
Herbalife said the joint venture would develop and commercialize high-quality consumer health products, using Tasly's deep portfolio of proprietary formulations, patents, know-hows, and clinical studies by leveraging the Herbalife Nutrition scientific, regulatory and commercial development expertise to bring products to a global market through the Herbalife Nutrition distributor network.
Michael Johnson, Herbalife CEO said, "Tasly's extensive patent portfolio, clinical research and traceability of key ingredients are an excellent complement to our Seed to Feed strategy. It's a natural partnership, strategic collaboration and we look forward to working with Tasly."
The partnership has come at a time when the company's international revenues are slowing. The company is also facing other headwinds such as an SEC probe on the company's corruption compliance in China, management turnover; negative sentiment toward MLMs and the ongoing forex headwinds. Will the China connection help the company leave behind all its woes and thrust forward with vigor?
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