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(Updated – September 13, 2021 5:30 PM EDT)
Herbalife Nutrition (NYSE: HLF), a leading global nutrition company, announced today that it has revised its guidance for the third quarter and full year of 2021. The company is making this announcement ahead of its Virtual Investor Day on September 14, 2021 to ensure investors have the most up-to-date financial information.
Recently, the company saw lower-than-expected activity among its independent distributors, resulting in a decline in expected net sales for the third quarter and full year. Nevertheless, we expect sales growth of approx. 14 to 18% for the third quarter compared to the third quarter of 2019 and for the full year growth of approx. 19 to 23% compared to the full year 2019.
The number of sales directors actively selling through the channel increased 10% in the months of July and August compared to 2020. In addition, the company expects in the third and fourth quarters as part of the on-going share buyback program.
“The company has posted year-over-year growth for the past eight quarters and double-digit year-over-year net sales growth for four consecutive quarters. We are on track for another record year of sales with sustained growth and significant cash generation, which will enable us to continue to benefit from the fundamental tailwind of the global food industry and the strong demand for our science-based products that continues to be enjoyed by consumers the value of good nutrition is valued. However, the uncertainty in global markets fueled by the prolonged pandemic has created unique challenges in predicting behavior in the channel, ”said John Agwunobi, CEO of Herbalife Nutrition.
The company remains on track for a second record year in a row and expects full-year net sales growth of 4.5% to 8.5%, reflecting a lower 400 basis point median compared to its previous full-year 2021 forecast. The company’s revised guidance for the third quarter predicts a decrease in net sales in a range of 6.5% to 3.5%, which represents a decrease in the mean of 700 basis points compared to the guidance for the previous third quarter. The company also updated the adjusted c diluted EPS forecast for full year 2021 to a range of $ 4.55 to $ 4.95, lowering the mean by $ 0.15 from the previous full year 2021 forecast became. Adjusted EBITDA for the full year will be reduced from $ 875 million to $ 935 million to a range of $ 860 million to $ 910 million.
The company will announce further details and insights into the company’s position and future on Tuesday during its virtual investor day. To register, please visit https://ir.herbalife.com/investor-day.
Below are the company’s updated projections for the third quarter and full year 2021 based on current business trends:
|
Three months ended |
Twelve months end |
|||
|
September 30, 2021 |
December 31, 2021 |
|||
|
Low |
High |
Low |
High |
|
|
Growth in volume points (decrease) compared to 2020 |
(9.0%) |
(6.0%) |
1.0% |
5.0% |
|
Net sales growth (decrease) 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 (in millions of US dollars) (a) (b) (c) |
$ 200.0 |
$ 220.0 |
$ 860.0 |
$ 910.0 |
|
Cap Ex (Million US Dollars) |
– |
– |
$ 160.0 |
$ 200.0 |
(Consensus provides for Q1 EPS of 1.17 USD and FY EPS of 4.99 USD
Share buyback in guidance
- In relation to the guidelines, the company cannot accurately predict the impact of future share buybacks on its share base. Accordingly, any effects thereof are excluded from the orientation table above.
| (a) All future potential currency devaluations in Venezuela and the associated price and inflation consequences are excluded. | |
| (b) Excludes the following items, which cannot be accurately predicted: any future potential ongoing tax effects from the exercise or exercise of stock awards that could affect the company’s tax rate due to the accounting standard for stock compensation, benefits from future potential China- Grant income, any future potential dilution from the company’s convertible bonds due in 2024, and any future impact of the China Growth and Impact Investment Program. | |
| (c) Adjusted diluted earnings per share and adjusted EBITDA forecast are non-GAAP measures and exclude potential charges or gains that may be recognized during the applicable period, including but not limited to the risk of loss, debt settlement gains / losses, and refinancing , Taxes fees related to tax law changes, net expenses related to the COVID-19 pandemic, and other unforeseen fees and events. The Company does not provide reconciliations of the forward-looking non-GAAP Adjusted EPS and Adjusted EBITDA Net Income targets, the GAAP benchmark, because the impact and timing of these potential charges and gains cannot be without undue effort due to their inherent historical variability can be determined, complexity and unpredictability. These items, which are required in order to present the GAAP reconciliation, could potentially have a material impact on the company’s GAAP results. See non-GAAP measures below. | |
