Herbalife Nutrition, a premier global nutrition company, today
hosted a virtual investor day with presentations on the Company’s
growth outlook, and its long-term strategy. In addition to
presentations from the Company’s CEO, president and CFO, investors
sat in on a fireside chat with other members of management,
moderated by Jefferies Managing Director Stephanie Wissink.
Highlights can be found in this release and a replay of the day’s
events along with a copy of the materials referenced will be
available on September 15, 2021 on the Company’s investor relations
page at https://ir.herbalife.com.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20210915005405/en/
“With a renewed focus on driving shareholder value, our
long-term strategy will open up a whole new chapter of growth,”
said John Agwunobi, Chairman and CEO of Herbalife Nutrition.
Agwunobi kicked off the day with an overview of the Company’s
strategy, long-term growth outlook, and focus on maximizing
shareholder value. Then, the Company’s President, John DeSimone
detailed a number of key strategic objectives.
“Over the past four quarters, the U.S. generated approximately
3.4 million new customers, and we believe there is a huge
opportunity to drive top-line growth by improving customer activity
and retention rates by focusing on key strategies including new
product innovation, nutrition club expansion, digital
transformation, and efforts to enhance trust in our brand,” said
DeSimone.
- Local Product Innovation expands the Company’s
commitment to quality and product choice with a greater focus on
local market product development. The Company’s investment in
science, manufacturing and improved speed to market has reduced the
launch times for some new products by 22%. Expanded local product
development will enable the Company to develop products that
resonate with local target audiences. The Company also expects to
launch a vegan line next year as well as other clean label
options.
- Nutrition Club Expansion is an important area of global
growth for the Company. Nutrition Clubs, which are brick-and-mortar
locations owned and operated by distributors, are rapidly expanding
in number around the world.
- The clubs create a sense of community and offer a location to
consume products and experience the value that our distributor
coaches create. Currently, there are approximately 11,000 locations
in the U.S. and more than 72,000 globally.
- In the U.S., single servings prepared at clubs represented
approximately 33% of total U.S. sales in Q2 2021.
- Digital Transformation. The Company is investing
significantly to provide distributors with knowledge, insights, and
technology to help them be more efficient and more effective, grow
their businesses and better connect with their customers. These
technology investments will be designed to use data-driven
capabilities to enable distributors to cross-sell and upsell in an
intelligent way, while leveraging analytics and AI.
- In the U.S., the Company captures virtually all customer
transactions and currently has detailed information on more than
58.9 million customer transactions from the last four quarters. The
Company plans to extend similar data gathering programs globally in
order to better predict customer behaviors, which in turn will help
improve customer experience, customer activity and retention.
- Enhanced Trust in the Brand is another important
strategic focus as the Company focuses on further strengthening its
reputation, respect and credibility in society.
- A strategic refresh of the Company’s brand reflecting the
unique value proposition that the Company and its distributors
present will be introduced at its large global distributor event in
2022
- The Company’s Environmental, Social, and Governance (ESG)
strategy elevates its position as a leader in nutrition and in
providing economic opportunities to expand the Company’s commitment
and impact related to important global issues.
- A presentation highlighted the Company’s effort to further
strengthen its relationship with “Gen Z” and “Millennial”
entrepreneurs. During the second quarter of 2021, two-thirds of our
new distributors and preferred customers where GenZ or
Millennials.
Executive presentations wrapped up with a financial presentation
by Chief Financial Officer Alex Amezquita that included among other
things insight into historical performance, global trends
supporting organic net sales growth, and capital allocation.
The presentation explained why the Company expects long-term
organic annual net sales growth in the mid to high-single digit
range, believes annual adjusted EBITDA growth in the high-single
digit range is achievable, and believes adjusted earnings per share
growth is on track to be in the double-digit range. It is important
to note that the growth rate estimates for net sales, adjusted
EBITDA and adjusted diluted EPS assume a constant currency
environment.
“Consumer demand for our nutrition products has created momentum
in our business that puts us in a position of strength for
long-term growth. This opportunity is reflected in our long-term
growth algorithm which we believe presents an attractive investment
opportunity for investors,” said Amezquita.
The Company’s capital allocation policy has enabled it to
service its debt, invest for the future and return approximately
$5.6 billion dollars over the past 10 years.
The event concluded with a financial update and a live Q&A
session with the Company’s CEO, President and CFO. During the
Q&A session, management confirmed that as part of its ongoing
share repurchase program, the Company expects to repurchase more
than $200 million in shares in the third and fourth quarters, and
that during the third quarter, approximately $76.6 million in
shares had been repurchased thus far.
Additionally, management provided the following volume points by
region for the third quarter-to-date through August 31 during the
Q&A session:
REGIONAL VOLUME POINT METRICS
Third Quarter-to-Date Through August
31
Region
2021 (mil)
2020 (mil)
% Change
North America
298.0
349.7
-14.8%
Asia-Pacific
325.3
293.2
10.9%
EMEA
258.1
285.1
-9.5%
China
62.9
97.6
-35.6%
Mexico
144.4
159.3
-9.4%
South and Central America
82.4
98.4
-16.3%
Worldwide
1,171.1
1,283.3
-8.7%
Year-to-Date Through August 31
Region
2021 (mil)
2020 (mil)
% Change
North America
1,269.3
1,198.1
5.9%
Asia-Pacific
1,305.3
1,055.6
23.7%
EMEA
1,127.8
1,028.5
9.7%
China
270.4
366.9
-26.3%
Mexico
576.9
582.6
-1.0%
South and Central America
332.3
334.1
-0.5%
Worldwide
4,882.0
4,565.8
6.9%
Trends through the first part of September have been consistent
with that seen in the first two months of the quarter.
The Company’s third quarter ending September 30, 2021 is still
ongoing and although the interim third quarter results and updated
third quarter and full year 2021 guidance discussed herein, during
the Company’s investor day presentation earlier today and in the
Company’s press release dated September 13, 2021 reflect some
interim third quarter information, the Company has not begun the
quarter-end process of compiling, analyzing and finalizing the full
results for the quarter. The Company’s independent registered
public accounting firm has not reviewed any of the interim third
quarter information. As such, there can be no assurance that
reported results will be in the ranges specified. The Company
expects to report its final results for the third quarter of 2021
on November 2, 2021.
About Herbalife Nutrition Ltd.
Herbalife Nutrition (NYSE: HLF) is a global company that has
been changing people's lives with great nutrition products and a
business opportunity for its independent distributors since 1980.
The Company offers high-quality, science-backed products, sold in
over 90 countries by entrepreneurial distributors who provide
one-on-one coaching and a supportive community that inspires their
customers to embrace a healthier, more active lifestyle. Through
the Company’s global campaign to eradicate hunger, Herbalife
Nutrition is also committed to bringing nutrition and education to
communities around the world.
Forward-Looking Statements
This release contains “forward-looking statements” within the
meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Although we believe that the
expectations reflected in any of our forward-looking statements are
reasonable, actual results could differ materially from those
projected or assumed in any of our forward-looking statements. Our
future financial condition and results of operations, as well as
any forward-looking statements, are subject to change and to
inherent risks and uncertainties, many of which are beyond our
control. Additionally, many of these risks and uncertainties are,
and may continue to be, amplified by the COVID-19 pandemic.
Important factors that could cause our actual results, performance
and achievements, or industry results to differ materially from
estimates or projections contained in or implied by our
forward-looking statements include the following:
- the potential impacts of the COVID-19 pandemic on us; our
Members, customers, and supply chain; and the world economy;
- our ability to attract and retain Members;
- our relationship with, and our ability to influence the actions
of, our Members;
- our noncompliance with, or improper action by our employees or
Members in violation of, applicable U.S. and foreign laws, rules,
and regulations;
- adverse publicity associated with our Company or the
direct-selling industry, including our ability to comfort the
marketplace and regulators regarding our compliance with applicable
laws;
- changing consumer preferences and demands;
- the competitive nature of our business and industry;
- legal and regulatory matters, including regulatory actions
concerning, or legal challenges to, our products or network
marketing program and product liability claims;
- the Consent Order entered into with the FTC, the effects
thereof and any failure to comply therewith;
- risks associated with operating internationally and in
China;
- our dependence on increased penetration of existing
markets;
- any material disruption to our business caused by natural
disasters, other catastrophic events, acts of war or terrorism,
cybersecurity incidents, pandemics and/or other acts by third
parties;
- noncompliance by us or our Members with any privacy laws,
rules, or regulations or any security breach involving the
misappropriation, loss, or other unauthorized use or disclosure of
confidential information;
- contractual limitations on our ability to expand or change our
direct-selling business model;
- our reliance on our information technology infrastructure and
manufacturing facilities and those of our outside
manufacturers;
- the sufficiency of our trademarks and other intellectual
property;
- product concentration;
- our reliance upon, or the loss or departure of any member of,
our senior management team;
- restrictions imposed by covenants in the agreements governing
our indebtedness;
- risks related to our convertible notes;
- changes in, and uncertainties relating to, the application of
transfer pricing, customs duties, value added taxes, and other tax
laws, treaties, and regulations, or their interpretation;
- our incorporation under the laws of the Cayman Islands;
and
- share price volatility related to, among other things,
speculative trading and certain traders shorting our common
shares.
We do not undertake any obligation to update or release any
revisions to any forward-looking statement or to report any events
or circumstances after the date hereof or to reflect the occurrence
of unanticipated events.
Non-GAAP Measures
The Company has included in this release adjusted diluted EPS
and adjusted EBITDA, performance measures that the Securities and
Exchange Commission defines as “non-GAAP financial measures.”
Management believes that such non-GAAP financial measures, which
exclude the impact of certain unusual or non-recurring items, when
read in conjunction with the Company’s reported results, calculated
in accordance with GAAP, can provide useful supplemental
information for investors because they facilitate a period to
period comparative assessment of the Company’s operating
performance relative to its performance based on reported results
under GAAP, while isolating the effects of some items that vary
from period to period without any correlation to core operating
performance and eliminate certain charges that management believes
do not reflect the Company’s operations and underlying operational
performance. The Company’s definition and calculation of adjusted
diluted earnings per share and adjusted EBITDA may not be
comparable to similarly titled measures used by other companies
because other companies may not calculate them in the same manner
as the Company does and should not be viewed in isolation from nor
as alternatives to diluted EPS or net income calculated in
accordance with GAAP.
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version on businesswire.com: https://www.businesswire.com/news/home/20210915005405/en/
Media Contact: Jennifer Butler Vice President, Media Relations
213.745.0420
Investor Contact: Eric Monroe Senior Director, Investor
Relations 213.745.0449
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