Herbalife Nutrition Revises Third Quarter and Full Year 2021 Guidance
13 September 2021 - 11:23PM
Business Wire
Herbalife Nutrition, a premier global nutrition company, today
announced it is revising its third quarter and full year 2021
guidance. The Company is making this announcement in advance of its
September 14, 2021 virtual Investor Day to ensure investors have
the most up-to-date financial information.
Recently, the Company observed lower than expected levels of
activity amongst its independent distributors that has led to a
decrease in expected third quarter and full year net sales. Despite
this, we anticipate net sales growth in the third quarter to be
between approximately 14%-18% versus third quarter 2019 and growth
for the full year to be between approximately 19%-23% versus full
year 2019.
The number of sales leaders actively selling in the channel is
up 10% for the months of July and August compared to 2020.
Additionally, the Company expects to repurchase more than $200
million in shares in the third and fourth quarters as part of the
on-going share repurchase program.
“The Company has delivered year-over-year growth for the past
eight quarters and four straight quarters of year-over-year
double-digit net sales growth. We are on track for another record
sales year with a sustained growth trajectory and significant cash
generation, positioning us to continue to benefit from the
fundamental tailwinds driving the nutrition industry globally and
the strong demand for our science-based products, as consumers
continue to appreciate the value of good nutrition. Yet,
uncertainty in global markets, fueled by the extended period of the
pandemic, has brought about unique challenges in predicting
behavior in the channel,” said John Agwunobi, CEO, Herbalife
Nutrition.
The Company remains on track for a second straight record-year
and expects full-year net sales growth in the range of 4.5% to
8.5%, which reflects a reduced midpoint of 400 basis points as
compared to prior full year 2021 guidance. The Company’s revised
third quarter guidance calls for a net sales decline in a range of
6.5% – 3.5%, lowering the midpoint by 700 basis points compared to
prior third quarter guidance. The Company also updated full year
2021 adjustedc diluted EPS guidance to a range of $4.55-$4.95,
decreasing the midpoint by $0.15 compared to prior full year 2021
guidance. Adjusted full year EBITDA is being reduced to a range of
$860-$910 million from the prior range of $875 - $935 million.
The Company will provide greater details and insights about the
state and future of the business on Tuesday during its virtual
Investor Day. To register, please visit
https://ir.herbalife.com/investor-day.
Following is the Company’s updated third quarter and full year
2021 guidance based on current business trends:
Three Months Ending
Twelve Months Ending
September 30, 2021
December 31, 2021
Low
High
Low
High
Volume Point Growth (Decline) vs 2020
(9.0%)
(6.0%)
1.0%
5.0%
Net Sales Growth (Decline) vs 2020 (a)
(6.5%)
(3.5%)
4.5%
8.5%
Adjusted Diluted EPS (a) (b) (c)
$1.00
$1.20
$4.55
$4.95
Adjusted EBITDA ($ millions) (a) (b)
(c)
$200.0
$220.0
$860.0
$910.0
Cap Ex ($ millions)
-
-
$160.0
$200.0
Share Repurchase in Guidance
- With respect to guidance, the Company cannot accurately predict
the impact to its share base from any future share repurchases.
Accordingly, any impact thereof is excluded from the guidance table
above.
(a) Excludes any future potential Venezuela currency devaluations
and associated pricing and inflationary consequences. (b)
Excludes the following items that cannot be accurately predicted:
any future potential ongoing tax effects from the exercise or
vesting of equity awards that could impact the Company's tax rate
due to the stock compensation accounting standard, benefits from
future potential China grant income, any future potential dilution
from the Company’s convertible notes due in 2024, as well as any
future impact of the China Growth and Impact Investment Program.
(c) Adjusted diluted EPS and adjusted EBITDA guidance are
non-GAAP measures and exclude potential charges or gains that may
be recorded during the applicable period, such as, among other
things, loss contingencies, gain/loss on debt extinguishments and
refinancing, tax charges relating to tax law changes, net expenses
related to the COVID-19 pandemic, and other unanticipated charges
and event. The Company does not provide reconciliations of
forward-looking non-GAAP Adjusted EPS and adjusted EBITDA guidance
to net income, the comparable GAAP measure because the impact and
timing of these potential charges and gains cannot be determined
without unreasonable efforts due to their inherent historical
variability, complexity, and unpredictability. These items, which
are necessary for a presentation of the reconciliation to GAAP,
could have a potentially significant impact on the Company’s GAAP
results. See Non-GAAP measures below.
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/20210913005864/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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