Investing.com - Herbalife sank in pre-market trading after the seller of supplements and weight-loss products announced that it had overstated metrics of “active new members” in three prior quarters.
Shares in Herbalife LTD (NYSE:HLF) tumbled almost 11% in the pre-market on Thursday after declaring in a regulatory filing that “database scripting errors led to both (i) the errant inclusion of additional categories of data in calculating the metric for parts of 2015 which were not included in the 2014 and prior period calculations and (ii) quarterly aggregation issues which created variances from period-to-period depending on when the greatest level of activity occurred during the relevant period.”
Among the data provided in the filing, Herbalife revised down the growth in active new members worldwide excluding China from 16.7% to 3.2%. It added that the year-on-year increase in the U.S. for the fourth quarter of 2015 was more than halved to 30.7%, from the prior erroneous 71.0%. Third quarter year-on-year growth in North America was decreased to 1.8%, from 33.0%.