The Los Angeles-based company said active new members worldwide grew 3.4% instead of 8.3% in 2015. Revised figures for the fourth quarter cut worldwide growth to 3.2% from 16.7%.
Herbalife cited a database error as the cause, saying "it had limited visibility into the likely rate of change" in the metric plan, which it began using last year.
The company has been under pressure from activist investor Bill Ackman and his Pershing Square Capital Management over its business practices.
Ackman has alleged that Herbalife is running a pyramid scheme, which involves making money by recruiting more salespeople instead of through selling products. Such models are illegal because they eventually collapse once there are no more people to recruit.
Herbalife sells weight-loss shakes and nutritional products through independent salespeople — which it calls its members — in more than 80 countries.
Members buy Herbalife products in bulk, which they either consume or try to resell. They are paid bonuses based on the sales of new members they recruit.
Herbalife has defended its practices, saying it is confident in the fundamentals of its business model, which it has said operates like a multilevel marketing company similar to Avon, Amway and Mary Kay.
Last month, the company disclosed that it is in talks with the Federal Trade Commission to potentially resolve the investigation surrounding its business practices.
Shares of Herbalife fell more than 7% in morning trading, but they are up more than 66% over the last year.
By: Associated Press.
Contributing: Melody Petersen (Times Staff Writer).
Photo: Luis Sinco (Los Angeles Times).
Review: Emerging Market Formulations &
Research Unit, Flagship Records.
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