Herbalife executes pre-sales-license strategy (HLF 2Q05 conf call quotes)

Herbalife (ticker: HLF), USANA Health Sciences (ticker: USNA), Avon (ticker: AVP), and Nu Skin Enterprises (ticker: NUS) are all awaiting issuance of direct selling licenses in China. In the meantime, Herbalife is making a host of preparations. Key quotes attributed to CEO Michael Johnson and COO Greg Probert from management's Q2 2005 earnings results conference call:

....We are working with the US and central Chinese government agencies to keep abreast with the latest development associated with the final regulations for operating a direct selling business model….

....The delay time in the regulations has not impacted our strategy, which is to be one of the first companies to attain a direct selling license. As a result of the delay, we decided to execute those aspects of our plan that are not contingent upon the release of the regulations.

....We expect to begin expanding our retail presence in this market in the fourth quarter. We will continue to enhance the manufacturing capabilities of our plant in Suzhou. We are continuing to invest in hiring key positions in the areas of government relations, sales, and marking, and finance. We are executing a communication strategy with our local Chinese distributors to prepare them for conversion to the new model. We have more than doubled our licensed products in the past year. We expect to have over 25 products ready for our fourth quarter launch. The product set in this region will vary slightly to support the local needs.

(Quotes are from the CCBN StreetEvents transcript.)

HLF chart.

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