Dr. Herbalife CEO John Agwunobi told CNBC on Monday that the nutritional supplement company is seeing sales increase as people care more about health and wellness.
"Many people around the world are aware of the notion that health is wealth and they spend the time leading healthy and balanced lives," Agwunobi told Closing Bell. "And they are looking for companies like ours that can provide them with healthy nutrition."
Earlier this month, the direct selling company saw net sales increase 8.6% to $ 1.3 billion for the second quarter compared to the same period last year.
"Our business had a strategy that worked very well prior to the coronavirus outbreak. Our products sold very well prior to the pandemic outbreak," said Agwunobi.
Agwunobi's comments come during a pandemic that has changed the way people deal with health and wellbeing. In the US in particular, lockdown orders designed to slow the spread of Covid-19 have resulted in gyms closing and people having to turn to home fitness and other ways to stay active.
But even if gyms do reopen in parts of the country, some people who visited them before the pandemic may choose not to return and instead choose "cheaper" ways to get active, according to a survey by TD Ameritrade stay.
However, some say that the coronavirus pandemic in general has highlighted the importance of fitness in fighting conditions such as obesity and cardiovascular disease. According to the Centers for Disease Control and Prevention, certain underlying diseases can put you at higher risk of serious illness from Covid-19.
"If you think about it, gyms are really a part of the health system, and turning us off is counterproductive," Chris Rondeau, CEO of Planet Fitness, told CNBC last month. "We are really part of the solution, not the problem."
Agwunobi, previously deputy minister of health in the Department of Health and Human Services under former President George W. Bush, said Herbalife had also seen increased demand from people wanting to sell its products during the pandemic, causing significant economic disruption in addition to its health consequences.
"A number of people are sitting at home working on their computers and realizing that there is another way to generate additional revenue streams," said Agwunobi, who is also a former Walmart executive. as president of health and wellness for the retailer. "So what we see is that a lot of people are getting into the business to help develop their own income streams."
Herbalife was forced to restructure its operations in the United States in a settlement with the Federal Trade Commission for over $ 200 million in 2016 after an in-depth review of its tiered marketing structure.
"Our past challenges are behind us," said Agwunobi, who became CEO earlier this year. "Our future is so bright."
Herbalife's shares were up 4.5% in 2020, closing the session on Monday at $ 49.80 apiece. The stock is up more than 100% since its coronavirus-era low of $ 20.73 on March 17.
Carl Icahn's company of the same name announced earlier this month that it had sold around 14.7 million Herbalife shares as part of the nutrition company's self-tendering offer. Icahn Enterprises remains the company's largest shareholder, with roughly 15.5% of the shares outstanding, according to a statement.
Icahn's position at Herbalife was known after his 2013 on-air feud with Pershing Square's Bill Ackman.
When asked whether Icahn's share sales lead to a rethinking of corporate strategy, Agwunobi said: "Not at all." He added that Icahn "has always shown his support for the leadership and strategy we have".