Q4 2024 Herbalife Ltd Earnings Call
Groceries sold in Megalonia, Canada Guaranteed interest
Thank you for watching!
In addition, during today's call, we will be discussing certain non-GAAP financial measures.
These non-GAAP financial measures exclude certain unusual or nonrecurring items that management believes impact the comparability of the periods referenced please.
Please refer to our earnings release and presentation materials for additional information regarding these non-GAAP financial measures and the reconciliations to the most directly comparable GAAP measure.
With that I will now turn the call over to chairman and CEO Michael Johnson.
Michael Johnson: Thanks, Erin and good afternoon, everyone and thank you for joining us today.
Today I have three pieces of good news to share with you.
Michael Johnson: First something I'm very excited about the appointment of stepping graziani.
Michael Johnson: Effective may one.
Michael Johnson: Next I'm equally excited.
Michael Johnson: Opinion, the role of president of worldwide markets and our third piece of good news is our positive financial results in improving distributor trends.
Michael Johnson: Let's start with the Q4 results, which were excellent we delivered net sales growth on a constant currency basis for both the fourth quarter and the full year on.
Michael Johnson: On a reported basis net sales for the fourth quarter were $1 2 billion slightly below the fourth quarter of 2023.
Michael Johnson: <unk> moved a lot during the fourth quarter had FX rates in November and December remain consistent with the FX rates inherent in our fourth quarter guidance net sales for the fourth quarter would have been up 1% year over year and at the end of a very high end of guidance. In addition to our good sales results in the fourth.
Michael Johnson: Quarter, we also delivered strong adjusted EBITDA results, which significantly exceeded guidance and prior year. During 2024, we also paid down 250 million of debt and reduced our total leverage ratio to three two times from three nine times at the end of last year.
Michael Johnson: John will go into more detail about the results in 2025 guidance later on the call.
Michael Johnson: When I returned Herbalife in October 2022 for the third time as CEO of <unk>.
Michael Johnson: Promised the board and myself to focus deeply and thoroughly on how we best go about succession and appoint the next CEO of this great company.
Michael Johnson: Herbalife operates in over 90 markets as a public company in the multilevel direct selling business, we offer science backed high quality nutrition and skin care products and a business opportunity through herbalife independent distributors that generated 5 billion in revenue and 635 million in adjusted EBITDA in 2002.
Michael Johnson: 24, we are the second largest direct selling company in the world.
Speaker Change: The nature of our global business and distribution method creates enormous opportunities and unique challenges when I joined Herbalife in 2003 from Disney Zero experience in direct selling my skill set was in retail marketing branding in global business management.
My learning curve here with speaks the early days as a private equity company afforded me the opportunity to adapt my skills to Herbalife business I made my share of mistakes, but I also set a vision for the brand product and distribution that saw us grow in sales and opened new markets. The best distribution ideas came from those.
Speaker Change: As to the markets, our herbalife independent distributors.
Speaker Change: As market has changed from where I started 22 years ago next month distributors, then and now are key to our growth and success, knowing what makes our distributors take setting in motion a vision and strategy to offer distributors and customers of herbalife.
Speaker Change: And wellness community and a platform to operate from is our next frontier.
Speaker Change: Years ago, I entertain the idea of bringing the distributor into the executive team of Herbalife Mark Hughes was the first herbalife distributor in the first CEO of Herbalife Mark to understand any of our distributors and business Scott Herbalife off the ground and running and 1980.
Speaker Change: Today, we are moving forward with our second distributor should I say former distributor as our new CEO Stefan Graziano Stephane as I said earlier were formally began his tenure as CEO in May <unk>.
This journey, the CEO began 33 and a half years ago, when Stefan started as herbalife distributors ship in France. His technical skills Thats, great. Scott in combination with this for journal sensibilities saw him climb and create one of the largest herbalife worldwide distributor ships.
Speaker Change: After my unsuccessful attempt in 'twenty 11, we succeeded in bringing Stefan aboard as Chief strategy Officer in 2023 the.
Speaker Change: The impact was immediate through his and his colleagues implementation we've reversed the post COVID-19 years recruiting decline reduced the decline in our topline and alongside the work of John Simone and our finance team greatly improved our income and solidified our balance sheet.
Speaker Change: Stefan Rose to President last year, and work with John and the team to define and soon implement a robust transformative digital strategy. The rise the CEO was a matter of time.
Speaker Change: The board and I carefully thought through this decision distributors and employees worldwide were important factors in our thinking.
Speaker Change: We know that we have the right CEO at the right time to build on our vision of being the world's Premier health and wellness company community and platform.
Michael Johnson: Super honored to welcome Stephane as Herbalife next CEO.
Speaker Change: I'm also honored to announce Rob Levy has accepted a new role of president of worldwide markets.
Speaker Change: Robs our good friend has been with Herbalife for 30 years and is at one time or another run every one of our regions has played a key role in opening more than 35 markets around the world has been responsible for numerous corporate functions, including our distributor facing businesses sales and marketing distributor operations.
Michael Johnson: Rob is respected in the industry and is committed to the success of our distributors and our employees. He has been an integral part of our leadership team and a trusted advisor to Stephane and to me.
Michael Johnson: He is known and respected by distributors around the world and just like Stephane. He's the right person at the right time and there is no one better prepared and more capable of working alongside Stephane to lead herbalife into the future.
Speaker Change: I am personally excited to continue my involvement with herbalife and looking forward to transitioning in the role as executive Chairman and continue my role on the board of Directors, where I will lead the board to support our executive team and focus on shareholder value.
Speaker Change: As I mentioned earlier, our company founder Mark Hughes was a distributor who had a vision to improve lives of people around the world. This month marks our 45th anniversary and it's only fitting we're announcing the appointment of a former distributors, our new CEO and a president who work directly with Mark Our company is in much better position than its been.
Speaker Change: A long time and underscore robbed and our team's leadership, we have an incredibly bright future.
Speaker Change: So now let me turn it over to our incoming CEO Stefan take it away.
Stefan: Thank you, Michael it's a privilege and honor to be stepping into the role of CEO and I'm excited to continue our partnership as you transition into the role of executive Chairman.
Stefan: Working alongside you, Rob and our incredible team of executives our distributor leaders and employees has reinforced what I already knew as a distributor the passion dedication and strength of our Herbalife company and community is unmatched as.
As the world's largest publicly traded direct sales nutrition company. The impact we have made in the world over the last 45 years is truly incredible our scale and reach globally puts us at a unique position for the future and that future is to become one of the world's most important health and wellness platforms.
Stefan: But before we talk more about that let's take a look at the fourth quarter and full year distributor trends.
Stefan: The initiatives, we launched in 2024 to rebuild our distributor base and activity levels are showing positive results as we look at slide six our positive trajectory continued with the key takeaways being a continuation of those I highlighted last quarter with.
Stefan: With the exception of China, New distributor growth continued across all markets starting with the chart on the left you can see new distributor growth was up 22% year over year in Q4, our third consecutive quarter of growth and up 11% for the full year compared to 2023.
Stefan: Moving to the chart on the top right you can see that all levels of our distributor leadership are active in bringing in new distributors, especially at the president team level as well as the mill team and getting levels. These individuals typically have the longest tenure has built the largest organizations and know how best to support new distributors again.
Stefan: We are very encouraged by the level of engagement at all levels in the marketing plan.
Stefan: Moving to the chart at the bottom of the slide you see the year over year quarterly change in the total number of active non sales leaders, which also includes members in markets without separate distributor and preferred customer programs. This summary is based on the regional supplemental metrics posted under the Investor Relations section of our website.
Stefan: As you can see Q4 marked our third consecutive quarter of year over year growth in our worldwide total active non sales leaders up double digits. Following three years of quarterly declines I want to reiterate what we have said in the past the growth in active non sales leaders as the foundation that leads to new sales leader growth.
Stefan: Then ultimately sales volume growth and.
Stefan: And in the fourth quarter, we achieved the next milestone with year over year growth in the number of worldwide average active sales leaders following 10 quarters of year over year declines. In addition in both the fourth quarter and full year, we achieved net sales growth on a constant currency basis and as you've seen in the guidance we provided today.
Stefan: We are projecting net sales growth on a constant currency basis in 2025.
Stefan: Things are happening according to plan our business is geographically diverse each region with its own unique opportunities and challenges, which we are addressing with market optimization strategies like we did in Latin America.
Stefan: Some regions are further ahead in the plan, while others are in the beginning phases quarter.
Stefan: Quarter by quarter, we're making steady progress.
Stefan: As we said we would.
Stefan: These positive trends are primarily driven by the multiple initiatives, we put into place since the beginning of 2024, including expanding and elevating our distributor training support and motivation through programs like the Herbalife Premier League Diamond development, Mastermind GMO, Masterclasses and leadership training sessions with <unk>.
Stefan: Eric Laurie we.
Stefan: We believe these initiatives have not only contributed to increased recruiting but also supported an increase in sales leader retention, which grew from 68, 3% last year to 73% this year.
Stefan: As you can see we're making progress and delivering on what we said we would do.
Stefan: These initiatives are yielding positive results.
Stefan: We're not stopping here we understand there is a broader question about the relevance of our business model and its future in the rapidly changing world we live in.
Speaker Change: As a distributor who built and grew in international business for 32 years.
Speaker Change: I had to personally navigate and lead my organization through changes in technology business models, changing consumer trends and industry competition.
Speaker Change: Since joining the company as an executive in August of 2023, we've never been more focused on how to leverage industry disruptors from how and where consumers want to purchase products in today's world to an ever evolving digital and gig economy to emerging health and wellness products trends and services, including G. L P ones and what.
Speaker Change: I know is that in addition to all of the initiatives we have rolled out there's a lot happening behind the scenes to ensure we leverage and build upon these disruptors.
Speaker Change: At the beginning of my remarks, I said herbalife is destined to become one of the world's most important health and wellness platforms as we align the entire company and our distributors around this vision you will start to see this expressed more and more through our digital tech stack, our products and our services.
Speaker Change: There are many things that differentiate herbalife from other companies in the direct selling industry.
Speaker Change: It's not only our size and reach.
Speaker Change: Or that we have approximately 65000 physical locations around the world. The Big differentiator is the fact that we have millions of distributors, whose passion is to make an impact on the health and well being of their families customers and communities are.
Speaker Change: Our executive team's mission is to make sure we build the platform that enables them to make that impact. So they can do it at a scale that is unprecedented not only in the direct selling industry, but in the health and wellness industry overall.
Speaker Change: I want to close by saying my years as a distributor were nothing short of life changing it was Herbalife gave me an entrepreneurial opportunity to build a life I never imagined was possible. It's one of the reasons I do what I do every day to make sure others have the same opportunity to find herbalife improve their health and wellness have a thriving successful business.
Speaker Change: And live their best lives as CEO I will continue to focus our efforts on realizing our vision of becoming the world's Premier health and wellness company community and platform our belief in our business model and the value service and opportunity. It provides has never been stronger.
Speaker Change: I'll turn it over to John Desimone, who will now cover our financial results.
John DeSimone: Thank you Stefan I'll begin with our Q4 financial highlights on slide eight.
John DeSimone: Please refer to our presentation appendix for our full year financial highlights.
John DeSimone: We are very pleased with our Q4 2024 results.
Both net sales and adjusted EBITDA were strong and would have been even stronger if not for the movement in currencies over the last few months.
John DeSimone: Net sales were $1 $2 billion down 0.6% versus Q4 of last year.
John DeSimone: However, on a constant currency basis net sales were up 2.7% versus Q4 of 2023.
John DeSimone: And further demonstrating the strength of our fourth quarter results.
John DeSimone: When we provided our guidance at the end of October.
John DeSimone: Ex assumptions were based on the average daily exchange rates for the first two weeks of October 2024.
John DeSimone: Had FX rates in November and December remained consistent with the rates inherit in our Q4 guidance net sales for the fourth quarter would have been approximately one point to $3 billion or a 1% increase over Q4 of 2023, which would have been at the very high end of our guidance range of <unk>.
John DeSimone: One 3% to up 1% year over year.
John DeSimone: Currency movements, especially the movement over the past few months is the theme that carries into our 2025 outlook, which.
John DeSimone: Which I'll talk more about a little later.
John DeSimone: Full year 2024, net sales were $5 billion down one 4% year over year on a reported basis on a constant currency basis net sales were up one 2% for the year.
John DeSimone: Our net sales are relatively stable and we've had growth in both the fourth quarter and full year on a constant currency basis.
John DeSimone: And we remain focused on driving sustainable net sales growth.
John DeSimone: Moving to adjusted EBITDA.
John DeSimone: Our fourth quarter, adjusted EBITDA was $150 million and above our guidance range of $105 million $235 million.
John DeSimone: Adjusted EBITA margin was 12, 4% up 340 basis points versus Q4 of 2023.
John DeSimone: Primarily driven by our restructuring and other cost savings initiatives implemented in 2024.
John DeSimone: Full year, adjusted EBITDA was $635 million and significantly exceeded last year's adjusted EBITDA of $571 million.
John DeSimone: Additionally, our adjusted EBITDA margin of 12, 7% was up 140 basis points versus 2023.
John DeSimone: Capex for the fourth quarter was $26 million at.
John DeSimone: At the low end of our guidance range of $25 to $45 million.
John DeSimone: And capitalize SaaS implementation costs were approximately $3 million in the quarter.
John DeSimone: Q4, gross profit margin improved to 77, 8% up 150 basis points compared to the fourth quarter of last year.
John DeSimone: The increase in gross profit margin was primarily due to pricing actions, we took throughout the year, which drove approximately 80 basis points of benefit.
John DeSimone: Along with approximately 30 basis points of favorability from reduced input costs, mainly related to manufacturing efficiencies.
John DeSimone: And an additional 30 basis points from the benefit of lower inventory write downs.
John DeSimone: Fourth quarter net income of $178 million includes $147 million of noncash net deferred income tax benefits related to changes we made to our corporate entity structure during the fourth quarter, which also included intra entity transfer.
John DeSimone: Ours of intellectual property to one of our European subsidiaries.
John DeSimone: These changes were made as part of our ongoing business transformation initiatives and to facilitate efficient internal cash movement.
John DeSimone: These noncash net deferred income tax benefits are excluded.
From our adjusted results and going forward in future periods. The net noncash deferred tax effects related to this benefit will also be excluded from the adjusted results.
John DeSimone: Q4 diluted EPS.
John DeSimone: Of $1 74 includes $1 44.
John DeSimone: Favorable impact related to the noncash net deferred income tax benefit recognized in the quarter.
John DeSimone: Adjusted diluted EPS of <unk> 36 includes a seven cent exit headwind versus Q4 of 2023.
John DeSimone: Operating cash flows for the quarter were $70 million down approximately $27 million from the fourth quarter of 2023.
John DeSimone: Reflecting elevated interest payments in 2024, primarily driven by the first semiannual interest payment on the 2029 12, a quarter percent notes in October.
John DeSimone: In addition, last year's fourth quarter operating cash flow included a $30 million refund received in connection with the Korean custom duty settlement.
John DeSimone: We ended the year with our revolving credit facility fully undrawn.
John DeSimone: <unk> credit agreement EBITDA for the fourth quarter was $164 million.
John DeSimone: And we further reduced our total leverage ratio to three two times as of December 31 from three nine times at the end of December 2023.
John DeSimone: For additional details.
John DeSimone: Regarding the adjustments between adjusted EBITDA and credit agreement EBITDA as well as the calculation of our total leverage ratio. Please refer to our presentation appendix in the earnings press release.
John DeSimone: Turning to slide nine we.
John DeSimone: And we see the drivers of our fourth quarter net sales performance year over year.
John DeSimone: On a reported basis fourth quarter net sales were down 0.6% year over year, while up two 7% on a constant currency basis.
John DeSimone: Overall volumes were down 0.7% year over year, which.
John DeSimone: Which was more than offset by approximately $44 million of pricing benefits.
John DeSimone: FX was an approximately $40 million headwind year over year with 330 basis points in.
John DeSimone: And as I highlighted earlier the surge in the U S. Dollar in November and December drove an approximately 160 basis point FX headwind.
John DeSimone: Between our reported net sales.
Our expectations communicated in October for the quarter.
John DeSimone: Turning to slide 10.
John DeSimone: We had the regional net sales results for the fourth quarter.
John DeSimone: Latin America, EMEA and Asia Pacific All reported net sales growth in the quarter on both a reported and local currency basis.
John DeSimone: Latin America net sales were up 2% on a reported basis and up 15% on a local currency basis.
John DeSimone: Favorable year over year, net pricing and increased volumes were partially offset by unfavorable FX headwinds.
John DeSimone: Primarily due to the Mexican peso and the continued devaluation of.
John DeSimone: The Argentine peso.
John DeSimone: Mexico's net sales were up 2% year over year on a reported basis and up 16% on a local currency basis.
John DeSimone: Driven by higher volumes in 2024, and a 5.25% price increase in March of 2024.
John DeSimone: The improvement in volumes is partially due to a softer comp versus 2023 as a result of the importation delays we experienced in Mexico in the second half of last year due to the government delaying timely approval of importation permits. We believe this drove approximately 11 million.
John DeSimone: Of lower net sales in Q4 of 2023.
John DeSimone: EMEA net sales were up 3% year over year on a reported basis and local currency net sales up 6%.
John DeSimone: Favorable year over year pricing and sales mix were partially offset by volume declines and unfavorable FX headwinds.
John DeSimone: Year over year results were generally mixed across the many markets in the region.
John DeSimone: In Asia Pacific net sales were up 1% on a reported basis and up 3% on a local currency basis.
John DeSimone: Favorable year over year pricing was partially offset by volume and unfavorable FX.
John DeSimone: In India net sales were up 3% on a reported basis and up 4% on a local currency basis, primarily due to favorable pricing on nearly flat volumes year over year.
John DeSimone: In November 2024, the market implemented a 3% price increase.
John DeSimone: In North America, while net sales were down 3% year over year. This is the third consecutive quarter, we have seen an improvement in the quarterly year over year trends.
John DeSimone: For the fourth quarter favorable year over year pricing in the region was more than offset by lower volumes.
John DeSimone: Volume points were down 4% year over year.
John DeSimone: Down 6%, excluding the 10% volume point adjustment, we implemented in mid December 2024 on most products in the U S and Puerto Rico for strategic reasons.
John DeSimone: Because of the recent changes in volume points in some of our markets and the possibility for additional changes in other markets.
John DeSimone: Volume point metric isn't as useful as it once was.
John DeSimone: In future periods. It is likely we will stop reporting volume points and focused primarily on net sales. However, we will continue to provide the impact that volume changes have on a year over year net sales comparisons.
John DeSimone: China net sales decreased 20% year over year on both a reported and local currency basis, driven by volume declines.
John DeSimone: Moving to slide 11.
John DeSimone: We see the drivers of the $41 million or 38% year over year increase in fourth quarter adjusted EBITDA.
John DeSimone: Q4, adjusted EBITDA was strong at $150 million with a margin at 12, 4% up 340 basis points year over year looking at the bridge. The majority of the margin improvement can be seen in the benefit from price increases manufacturing efficiencies.
John DeSimone: And a number of other cost savings initiatives implemented during 2020 for.
John DeSimone: This is partially offset by lower volumes unfavorable sales mix and year over year, FX movements, which drove an approximately $12 million reduction in adjusted EBITDA year over year.
John DeSimone: Sure.
John DeSimone: Moving to slide 12.
John DeSimone: I'll provide an update on our capital structure.
John DeSimone: During 2024.
John DeSimone: We reduced our debt by nearly $250 million.
John DeSimone: As of December 31st our revolving.
John DeSimone: The credit facility remained fully undrawn.
John DeSimone: As I stated earlier, we further reduced our total leverage ratio to three two times as of December 31st down from three nine times as of December 31 of 2023.
John DeSimone: And we believe we are on track to reduce our total leverage ratio to three times by the end of 2025.
John DeSimone: As we communicated on our Q2 earnings call up last year. It is our intent to pay down $1 billion of debt by the end of 2028.
John DeSimone: At that time, the time I made that comment our principal amount.
John DeSimone: Debt outstanding was $2 $4 billion therefore.
John DeSimone: Therefore, we have a target to reduce our debt to $1 $4 billion by the end of 2028.
John DeSimone: We made steady progress on that objective in 2024.
John DeSimone: And we further reduced our debt since year end as we indicated as part of our plan on our third quarter earnings call last week, we redeemed $65 million of the 2025 notes for an aggregate purchase price of approximately $67 million, which included $2 million of accrued.
John DeSimone: And unpaid interest.
John DeSimone: Leaving a balance of $197 million outstanding on the 2025 notes, which we plan to repay.
John DeSimone: At or prior to the September 2025 maturities.
John DeSimone: Moving to slide 13.
John DeSimone: We will review our outlook for the first quarter and full year 2025.
John DeSimone: Given where FX rates are trading today, we expect FX to be a significant headwind for us in 2025 are much greater headwind than it would've been even a quarter ago.
Therefore in addition to our usual net sales and adjusted EBITDA guidance, which uses the average exchange rates for the first three weeks of January 2025, we are also providing net sales and adjusted EBITDA guidance at constant currency for the respective periods.
John DeSimone: For the first quarter, we expect net sales to be in a range of down one and a half to down five 5% year over year, which includes an approximate 550 basis point headwind from currency.
John DeSimone: On a constant currency basis.
John DeSimone: We expect net sales to be flat to up 4% year over year in Q1.
John DeSimone: We expect adjusted EBITDA to be in the range of $140 million $250 million.
John DeSimone: While in the range of $158 million to $168 million on a constant currency basis.
John DeSimone: Our planned capital expenditures for the first quarter or in the range of $30 million to $40 million.
John DeSimone: And while we do not provide cash flow guidance keep in mind, the first quarter tends to be the lowest cash flow quarter of the year Cintas is when we pay the Mark Hughes annual distributor bonuses as well as employee bonuses.
John DeSimone: Moving to our full year guidance.
John DeSimone: Currency had an approximately $200 million negative impact to our 2025 net sales and approximately $70 million negative impact to our 2025 adjusted EBITDA.
John DeSimone: We expect full year net sales to be in the range of down 3% to up 3% year over year.
John DeSimone: Whereas on a constant currency basis, we expect net sales to be up 1% to up 7% year over year.
John DeSimone: We expect adjusted EBITDA to be in the range of 600 million to $640 million.
John DeSimone: While in the range of $670 million to $710 million on a constant currency basis.
John DeSimone: Capital expenditures for the year are expected to be in the range of $100 million to $130 million.
John DeSimone: We expect full year capitalized implementation costs to be in the range of 25 $30 million, which is incremental to our planned capex.
John DeSimone: DNA, including amortization of SaaS implementation costs.
John DeSimone: Is expected to be in the range of $140 million to $150 million.
John DeSimone: For the full year 2025, we expect our adjusted effective tax rate to be approximately 30%.
John DeSimone: Over the past several weeks and months Theres been a lot of discussion headlines related to China, Canada, and Mexico tariffs with respect to these three markets our potential exposure is not material with the exception of potential retaliatory tariffs for Mexico.
John DeSimone: If the tariffs would be applicable to our products with approximately six months of inventory already within the borders of Mexico.
John DeSimone: Any meaningful potential exposure if any.
John DeSimone: B in the later part of the year for that reason and a lack of clarity on what if any retaliatory tariffs might be implemented we have excluded any potential impact from guidance.
Speaker Change: Before we move to Q&A I want to close my opening remarks with the following point.
John DeSimone: Our results are very strong.
John DeSimone: <unk> got increasingly stronger during 2024.
John DeSimone: Since Q1, our distributor metrics have been improving consistently.
John DeSimone: And in a logical manner.
John DeSimone: From growth in new distributors.
John DeSimone: To then growth in active non sales leaders to now growth in sales leaders.
John DeSimone: Our sales leader retention rate grew from 68, 3% last year to 73% this year.
John DeSimone: And these metrics have begun to rebuild our foundation.
John DeSimone: And are expected to drive meaningful constant currency net sales growth in 2025.
John DeSimone: As we have been indicating it would during our previous earnings calls.
John DeSimone: Our adjusted EBITDA performance significantly improved in 2024.
John DeSimone: From approximately $570 million in 2000 $23 million to $635 million.
Our adjusted EBITDA margin also significantly improved from 11, 3% in 2023 to 12, 7% in 2024, despite a currency headwind.
John DeSimone: And that strong performance continues into 2025.
John DeSimone: On a constant currency basis, adjusted EBITDA margin would exceed 13% in our guidance.
John DeSimone: Even with a significant currency headwind in 2025.
John DeSimone: Our expected adjusted EBITDA margins are forecasted to be in the mid 12% range.
John DeSimone: Cash flow generation has been strong we started 2024 with a total leverage ratio of three nine times and have reduced it to three two times.
John DeSimone: And reduced total debt by $250 million in 2024.
John DeSimone: With all that we accomplished in 2024.
John DeSimone: From net sales performance trending in the right direction and positive on a constant currency basis.
John DeSimone: To meaningful EBITDA improvements.
John DeSimone: Significant debt reduction and strong and improving distributor metrics. These accomplishments are not yet reflected in our valuation.
John DeSimone: We have an incredibly resilient business.
John DeSimone: Our distributors culture is to adapt to an ever changing global environment. Unlike most other direct selling companies.
John DeSimone: And maybe unlike any other direct selling company.
John DeSimone: We've proven that multiple times over our history.
John DeSimone: And are proving it again now.
John DeSimone: The number of new distributors are growing unlike most other direct sellers are constant currency net sales are growing unlike most other direct sellers.
John DeSimone: Our distributors operate approximately 65000 fixed locations globally.
John DeSimone: Unlike any other direct seller.
John DeSimone: Our president and future CEO was an incredibly successful distributor for 32 years.
John DeSimone: A powerful competitive advantage compared to most other direct sellers.
The landscape has changed a lot over the past few years and we are now set up for the future to continue building on the positive trends experienced in 2024 and expected to continue throughout 2025 and beyond.
John DeSimone: This year, we will be committed to helping investors understand and appreciate the power of our business and how it is different than it is perceived and how it is different than it is being valued.
John DeSimone: This concludes our opening remarks, operator, please open the call for questions.
John DeSimone: Thank you.
John DeSimone: I would like to ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw your question Press Star One again, one moment, while we compile the Q&A roster.
Speaker Change: And our first question will come from the line of William Lauder with Bank of America. Your line is open.
Speaker Change: Hi, guys. Good evening. Thank you for taking our question. This is rob break be on for Bill.
Speaker Change: So I guess the first one from us would be.
Speaker Change: What do you think needs to happen.
Speaker Change: To turn around.
Speaker Change: Eric and volume trends or how long do you expect us to take.
Speaker Change: Hey, Rob Thanks for the question.
We've been talking for the last couple of quarters about the fact that we need to rebuild the distributor base and the supervisor base.
Speaker Change: So after 14 quarters of decline.
Speaker Change: Quarter year over year quarterly year over year, we finally saw last quarter. The supervisor the active supervisor base rebuilt and that came after three quarters of new distributor growth.
Speaker Change: Again, it's a question of rebuilding.
Speaker Change: We've been saying, it's kind of time and time again, it's a quarter by quarter, but we're very positive about what's happening.
Speaker Change: And it's just a question of time, you've got certain markets that had come quicker than others in the U S is on track to have its moment, yes, if I can jump in so.
Speaker Change: Obviously, all regions performed really well and had constant currency net sales growth with the exception of Oregon.
Speaker Change: China, but north America, all of our relevant distributor metrics improved trends improved and syncrude multiple quarters in a row, our net sales.
Speaker Change: Went from down 10 to 11 ish in Q1 to down 7% Q2 to down 6% Q3 was down 3% in Q4, so it's still down but it's down mid to low single digits now trending in the right direction with the foundation of distributors.
Speaker Change: Metrics building. So I think we're on the right track. It is a matter of time, but it's not far away.
Great.
Speaker Change: Super helpful color and then.
Speaker Change: In terms of debt repayment.
Speaker Change: At your 2025 maturity is that is the plan just to pay that.
Speaker Change: It's due in September and then I guess.
Speaker Change: In terms of debt.
Speaker Change: The debt repayment over the rest of the year based on your total leverage.
Speaker Change: Guidance for 2025, it seems like that may be the only debt repayment that you are targeting in 2025, I guess is that correct.
It's mostly.
Speaker Change: It's mostly correct. So we have the 2025 just under $20 million due in September we're going to pay that down.
Speaker Change: Revolver is currently Undrawn, we will forward a little bit too to help pay down that debt.
Speaker Change: The 2025, and we said that since a year ago.
Speaker Change: We said that we could pay the 2025 with cash flow from the business at that point in time, our revolver was drawn at $170 million.
Speaker Change: So we anticipated that we would have some revolver drawn.
Speaker Change: September when we pay them.
Speaker Change: That gives us an opportunity to pay down the revolver post.
Speaker Change: Paying down 2020 guidance if that makes sense. So there is some opportunity beyond the 2025 to continue to pay down debt.
Speaker Change: Understood. Thank you very much I'll pass it on.
Speaker Change: Thank you one moment for our next question.
Speaker Change: And that will come from the line of Linda Bolton Weiser with D. A Davidson your line is open.
Speaker Change: Hello.
Congratulations on the progress being made and congratulations on your CEO ship.
Speaker Change: So I was wondering.
Speaker Change: About the constant currency sales guidance range for 2025 up 1% to 7%.
Speaker Change: Its pretty wide.
Speaker Change: Can you talk about like.
Speaker Change: Like what would dictate or what would have to happen for you to get to the high end and then what would have to go wrong or something for you to kind of end up at only one or 2% growth for the year.
Speaker Change: So a couple of things. So first of all I don't think 600 basis points is that wide in this environment.
Speaker Change: Some of the things we've done in the past so let me start there second is.
Speaker Change: On the high end.
Speaker Change: There is opportunities in China, and the U S beyond what we expected.
Speaker Change: We don't guide by region, but in those regions that has more upside I think than there is downside risk.
Speaker Change: That could get us to the high end and on the downside, it's probably the kind of the same.
Speaker Change: Same kind of markets.
Speaker Change: Markets that arent quite performing as well in 2024 as we hoped.
Okay.
Speaker Change:
Speaker Change: Also thank.
Speaker Change: By the way.
Speaker Change: Yeah.
Speaker Change: As importantly, I want to put this in perspective, alright, because I don't want to leave with we could be on the low end of guidance.
Speaker Change: Where this company has been for multiple years now we are projecting constant currency net sales growth in 2025, it's just a matter of how much alright and either one.
Speaker Change: 1% below the guidance that still a positive result gave us a lot of opportunity in 7% will dramatically.
Give us more opportunity, but it's still positive by the way.
Speaker Change: Yeah of course.
Speaker Change: And then.
Speaker Change: I guess my.
Speaker Change: Reading this right that with the currency impact your EBIT margin in 2025.
Speaker Change: It is not projected to really increase it looks flatter down right, including the FX impact.
Speaker Change: Yes, we have we have about a $70 million headwind on EBITDA right.
Speaker Change: Alright.
Speaker Change: Our EBITDA was 635 million in 2024, our guidance of 6% to six.
Speaker Change: So the guidance has only slightly below or slightly ahead of where we performed in 2020.
Speaker Change: And so margins won't change that much having said that is not for currency. They would've changed substantially there was an 80 basis point impact.
Speaker Change: Our 2025% EBITDA margin.
Speaker Change: From currency headwinds.
Speaker Change: Over 2024 average terms rates, so it's a meaningful headwind.
Speaker Change: If not for the headwind, we would be meaningfully higher EBITDA margin.
Speaker Change: Yeah, Okay and then.
Speaker Change: Yes.
Speaker Change: You know China, not only was it down but it was a little bit weaker than we had projected and in constant currency terms our revenue.
Speaker Change: The decline was a little worse.
Speaker Change: So maybe you could just kind of remind us what's going on there and how much of it is macro and how much of your controlling at this point and just kind of give US a reminder, about that market.
Speaker Change: Sure I'll take this one thank you.
Speaker Change: So China as we mentioned we made a major strategic shifts in the way our business.
Speaker Change: Is actually focused.
Was it really did turn to a customer focused and for the first time ever we launched in June of last year, our customer loyalty program.
Speaker Change: Which by the way yielded the kind of results that we wanted we have a much stronger customer base and growing customer base.
Speaker Change: So there was a shift in focus and we also shifted the focus for the Herbalife Premier League to be focused on customers instead of new sales reps something we adjusted towards the end of the year and so it was weaker than we had thought.
Speaker Change: The transition is a big transition is the first time, we've ever done something like this in the market and so yes, we were a little bit surprised just it was a little bit weaker but at the same time a lot of what we were trying to do has started and we're seeing the results there, but we're not satisfied with we know that market has potential in.
Speaker Change: We've got an event thats going to be taking place at their extravaganza, we're launching the diamond development mastermind there with the top leaders to really have them focus in and be able to put into place initiatives into their business in their markets to be able to get the kind of growth that we want to get out of China.
Speaker Change: Okay.
Speaker Change: Thank you one moment for our next question.
Speaker Change: And that will come from the line of John Baumgartner with Mizuho Securities. Your line is open.
John Baumgartner: Good afternoon, and thanks for the question.
Speaker Change: Maybe first off Stefan I wanted to come back to North America acknowledging the return to growth in non sales leaders and distributors, which it's a nice inflection, but looking specifically at preferred customers those were down 10% in Q4 and I know, it's not among your main kpis, but I am curious how you think.
Speaker Change: About the continued declines there is there a read across from that in terms of the pulse of the business your turnaround efforts, thus far and what what it might tell you about any additional refinements necessary for the model or the Herbalife brand.
Speaker Change: Yes. Thank you John for the question.
We've spoken in the past about the fact that over a number of years the business really shifted it went to more of a foodservice transactional business, which has been fantastic.
Speaker Change: I mean, we talked last year about these $4 4 million customers that had come in I can get in 2023, and it's a very strong business. It's a great foundation, but the transition of those foodservice.
Speaker Change: Customers to using the products from a product results standpoint has been an area of weakness for us and so a lot of the work has been focused on working with the clubs in the club leaders to have them build into their models. This incredible model of serving customers on a day to.
Speaker Change: <unk> basis.
Speaker Change: Offering a value in terms of product results and so on.
Speaker Change: Our business in the U S is a good percentage nutrition clubs, we have obviously different demographics different areas.
Speaker Change: That focus on different things, but I would say the big transformation for us and the focus is to really balance out the transactional with the transformational and so I think this is where we kind of see that we've got just kind of a mixed grew.
<unk> people in different places in their models I've really having the balance that they would want to have and we want them to have so we are just fully supporting that one of the things that really has started to happen. We mentioned as well last year was starting to have trainings instead of very basic vanilla here's how the.
Speaker Change: Here's information about the products is moving tomorrow GMO centric training and that's been something that we had a great success with here.
Speaker Change: And there is more demand for it so well.
Speaker Change: It's very positive. The response has been positive and there's just a lag in terms of distributors, putting everything that needs to be put into into their models to get the results that we want.
Speaker Change: So is it fair to think that what what you're attempting to affect the business is it fair to look at those preferred customers as sort of a barometer or a proxy for the progress you're making in terms of moving from transactional transformational.
Speaker Change: It is but it's also about what value they're being offered so some will just I will just we talked about this in the past, but some clubs.
Speaker Change: Uh huh.
Speaker Change: Transition from a customer who buys a shake the bar to a preferred customer.
Speaker Change: One or 2% so you've got 100 individuals walking into a class one or two are becoming preferred customers. So depending on the model that they have.
The actual conversion of customers to preferred customers as well our job is to have everybody rates. Those numbers. We believe that there is value in not just walking in and having a convenient healthy shape or key there's value in getting onto herbalife products and getting our product results.
Speaker Change: Is visible this field.
Speaker Change: A fundamental part of our business. So it is it a little bit of an indicating leader.
Speaker Change: Anything number, but we have work to do because in general overall the model hasn't really adopted the aspects do you need to adopt to make that happen and change those numbers, but we're working on it.
Speaker Change: Okay, and then and then John coming back to FX.
Speaker Change: It's a big drag on EBITDA this year per the guidance and I'm curious the business has some good sized exposure to regions, where you could argue currency depreciation is sort of a structural factor and translation impact is one thing but.
Speaker Change: You think about the underlying economics, I mean at what point does it maybe make sense to rethink their supply chain, where you ship more to local production and match with local consumption given that we could be in maybe a four year period of on and off the higher ups and disruption of who knows what happens after that.
Speaker Change: Yes, it's a great question, we do constantly look at those things and have re looked at it in the light of.
Speaker Change: Some of the tariff discussions that have been published.
Speaker Change: First let's take it into pieces most of the impact of currency.
Speaker Change: Is translation.
Speaker Change: Okay.
Speaker Change: Maybe 10% to $15 million of the 70 as transaction.
Speaker Change: So a lot of it is translation so that <unk>.
Speaker Change: <unk> is a little bit of the opportunity.
Speaker Change: The biggest.
Speaker Change: Currency.
Speaker Change: That's impacting us as the Mexican peso the second biggest is the euro.
Speaker Change: Most of our product in Europe is already dominate in Europe and mainland Europe.
Speaker Change: Mexico, we don't have the opportunity to produce locally for a number of reasons.
Speaker Change: If there's a tariff imposed we can make the product somewhere other than the U S potentially but we're not going to make it locally. So there is not a a lot of ability to create the natural hedges from manufacturing we have done it in a handful of countries, but even in those countries that has somewhat limited impact because a lot of the ingredients of pricing.
Speaker Change: Even at local conversion cost are priced in local currency so and.
Speaker Change: And we see that in Brazil, we make a number of products in Brazil, but the ingredients are pricing dollars. So it's just not a huge opportunities bigger opportunities on the price side.
Speaker Change: Yes.
Speaker Change: Currency movements.
Speaker Change: Work their way down into local inflationary.
Speaker Change: Changes in that we can take price increases.
Speaker Change: Is it seen the local inflationary.
Speaker Change: <unk> in the marketplace.
Speaker Change: Okay. Okay. Thank you.
Speaker Change: Thank you one moment our next question.
Speaker Change: And that will come from the line of Hale Holden with Barclays. Your line is open.
Hale Holden: Thanks, and congrats also on the new roles.
Speaker Change: John I have two quick ones for you. The first one is on the leverage target.
Speaker Change: Maybe you could do better than three times. This year I just wanted to make sure I wasn't missing anything.
Speaker Change: On your free cash flow bridge.
Speaker Change: Just because it's our stated goal is to be at or below three times and Thats Hasnt changed it doesn't mean, if we do better we do back that would be below.
But we have not changed.
Speaker Change: Alright.
Speaker Change:
Speaker Change: And the second question I had was.
Speaker Change: Maybe I need a textbook for dummies, but could you just tell us, which IP you move to Europe and then.
Speaker Change: Maybe walk through.
Speaker Change: Simplistically why it's not changing the 30% tax rate that you guys pay.
Speaker Change: Well, okay. So actually it is more complicated maybe than you might think and that's why you're asking the question. So we transferred some IP doesn't matter what IP rate, but it is intellectual property that we moved what the purpose of the of the move really is twofold. One is to facilitate better economic transfer of cash.
Speaker Change: In the future, which we need as we look to pay down debt.
Speaker Change: Wasn't contemplated in the original structure, we put in place, but the structure also gives us greater flexibility to move other things around like if we did want to move manufacturing around we did want to consolidate facilities. This structure gives us a better opportunity to do that now.
Speaker Change: This questionnaire.
Speaker Change: Question, that's why we did it.
Speaker Change: The impact on the future cash rate.
Speaker Change: Tax rate is excluded from guidance. This was a non cash benefit this year.
Speaker Change: Going forward, there will be somewhere around 500 basis point of noncash detriment.
Speaker Change: Offsets this over a long period of time, we will just keep carving it out we carved out this one will carve out the offsetting noncash debit that youll see in the P&L. So it doesn't change our cash tax at all it was noncash benefit this year it will be a noncash detriment in future years, but we've excluded it from guidance, which I think is important given its <unk>.
Speaker Change: Noncash given that we're looking at the major purpose of this.
Speaker Change: <unk> was to generate more cash to pay down debt, we're going to have a carved out the benefit when you carve out the detriment.
Speaker Change: Yeah.
Speaker Change: Great I'll follow that thank you very much.
Speaker Change: Thank you one moment, Sir our next question.
Speaker Change: And that will come from the line of carrier Martinsen with Jefferies. Your line is open.
Carrier Martinsen: Good afternoon, just regarding the different demographics of your distribution distributor base here in the United States. We've got a question a couple of times now is there an impact from the immigration policies some of the new administration.
Speaker Change: Hey, Kara and thank you for the question look I think everybody sees the headlines and it's hard to know the reality on the ground.
Speaker Change: For us it's just too early to tell if there is going to be any impact whatsoever.
Speaker Change: But.
Speaker Change: Yes.
Speaker Change: Headlines are headlines.
Speaker Change: How real it is and to what extent it's impacting.
Speaker Change: We just don't have enough to know right now.
Speaker Change: Okay, and then when we look at the Latin American distributor growth very strong numbers, how much do you feel that has been driven by the changes that you've done in the market.
Speaker Change: And is that something that you would think of replicating in other markets.
Speaker Change: Yes, I think there's a lot to do with what we've changed I mean, John can talk about kind of the optimization that we've done there, but there's been a lot of support for distributors in terms of just making sure the opportunity.
Speaker Change: Did they have financially speaking is really designed for their markets and so John maybe you can talk a little bit more about that yeah look I think the one size fits all which is kind of the foundation.
Speaker Change: Operating plan, we should call it marketing place our distributor compensation plant the.
Speaker Change: The incentive program was pretty similar across the globe.
Speaker Change: One of the big movements, we have along with distributed leaderships is to find the optimal incentive program for various countries based on what's going on in those countries.
Speaker Change: Our Latin American test kind of all Latin America markets, but its in most has been very successful and we do think that opens the door to.
Additional possibility so it's all about creating the optimal incentive program.
Speaker Change: Each market and it's one of the reasons why volume points on its a valuable metric as it used to be because now we're changing volume point. So when you look at the year over year comparison, it doesn't tell you much so.
Speaker Change: What we're going to do is not use that metric anymore publicly and just deal with net sales still providing investors with visibility into the change in net sales that came from volume, but we are going to use our endpoint anymore.
Speaker Change: Thank you very much I appreciate it.
Speaker Change: Thank you one moment our next question.
Doug Lane: And that will come from the line of Doug Lane with water Tower Research. Your line is open.
Speaker Change: Yes, hi, good evening, everybody and congrats Scott Robinson grew congrats as well.
Speaker Change: Stefan the number that really stuck out to me was that new distributor number the 22% is an acceleration, but it's a pretty sharp acceleration from 14% last quarter and 12% the quarter before after several years of negative. So I really wanted to drill down on what are you. What is going on what are you doing to drive that acceleration.
Speaker Change: Of new distributors and now as we see.
Speaker Change: Sales leader members.
Speaker Change: And how are we going to see that manifest ultimately in sales leaders.
Speaker Change: Hey, Doug Thanks for the question.
Look we've been saying the same thing for the last few quarters, right, we needed to and need to rebuild our distributor base.
Speaker Change: So since the beginning of last year all of the initiatives that were put into place whether it was to actually come up with a program that are like Premier League, which for the first time and I don't know how long is it should I don't remember there ever been a time like this where there was an actual program focused on distributors going out and having a top.
Speaker Change: <unk> of the amount of new distributors, they were going to bring into the business and along with that target would be also a focus on activating them.
Speaker Change: Along with that target a focus on getting 20% of those distributors to convert and to qualify supervisor and become sales leaders and so number one having a program that never existed before has made a difference it's been one initiative.
Speaker Change: That program actually really went far beyond our expectations. If we would've had the same program in 2023.
Speaker Change: Would have been seven times less people qualifying for it. So we have a situation where we've got our focus now as a company.
Speaker Change: We've brought in new training and given support to leaders that we've never done before in the past.
Speaker Change: We've upped the type of training that people are getting in terms of having access to understand what are the go to market strategies that are working so they have access to learn it and implement it and be supported in that until all of the initiatives and quite honestly the.
Speaker Change: Distributors.
Speaker Change: We can have all of the initiatives, but if the distributors don't take it on if theyre not focused and if they're not willing to put in the work then things don't happen and I think Thats, where you see this acceleration and the momentum and rebuilt.
Speaker Change: And so now our job is to support them in that process with the programs and initiatives the tools and the technology to go out and build and scale their businesses and so.
Speaker Change: We are just very steady we are on this focus will continue to deliver more service and value to the distributors and tools and allow them to go out and do what they do best which is build businesses.
Speaker Change: Well it certainly it certainly the numbers bear that out and looking at the average sales leader number it stabilized in the quarter for the first time also in many years and so I would read through that there's this new distributor growth is starting to manifest itself in sales leaders. So I guess the question is the timing and the magnitude of.
Speaker Change: Where we ultimately end up.
Speaker Change: Models are.
Speaker Change: Driven by the sales leader number.
Speaker Change: Yes.
Speaker Change: And again, we've been saying quarter by quarter.
Speaker Change: We have different regions at different places in terms of where they are in implementing and how many quarters of growth they have new distributors coming in and how.
Speaker Change: How high that growth is.
So it's really going to be the consistency of the rebuild over time.
Speaker Change: I wish I could.
Speaker Change: I think on a quarter I think we're confident moving into the second half of this next year or this year.
Speaker Change: We are going to hit our stride again quarter by quarter, we'll be back next quarter and sharing more but.
Speaker Change: We'd all love to have that.
Speaker Change: Ah.
Looking glass into the future and we just.
By quarter for us.
Dan: Got it fair enough. Thanks, Dan.
Dan: Thank you. Thank you I'm showing no further questions in the queue. At this time I would now like to turn the call over to Mr. Michael Johnson for any closing remarks.
Michael Johnson: Well I've got a few.
Speaker Change: This is Mike Swan song I'm, a little emotional about it I have to be honest.
Dan: Before we end the call I just wanted to acknowledge.
Michael Johnson: The events in Los Angeles over the last months.
Michael Johnson: The wildfires they've been impacted so many people distributors employees our communities.
Michael Johnson: And.
Speaker Change: Helpful hand.
Speaker Change: So many employees and we appreciate all those who have stepped up golfers support.
Speaker Change: Actually the first responders that are out there.
Speaker Change: And our true fashion, we've had employees and distributors come together.
Speaker Change: To provide nutrition financial assistance through our family Foundation, and then personally a lot of people were picking up close and delivering them a goodwill.
Speaker Change: Red Cross donations were made personal donations were made it just shows the strength of our community and how well we respond to things like this for those of you who are not in Leeds devastated.
Speaker Change: And this is our home this is where the company was founded by Mark Hughes and Mark had a dream of $19 80.
Speaker Change: And when I walked in the door here in 2003, I'm not sure I fully grasped are understood. It.
Speaker Change: What I was walking from my entertainment background with our content and distribution company I didn't realize the blood sweat and tears that went into the individual efforts that make this company. So interesting and so great. We've been portrayed MS portrayed overtime, we fought some battles.
Speaker Change: We dealt with some incredible instances mark did it in the 80 to 90 I had to do it in the tens and twenties and fifteens and.
Speaker Change: And deal with lies and misinformation.
Speaker Change: Images that got smacked for our company that just weren't true.
Speaker Change: I could drag each of you to our supply chain to see the quality and the science and the products that we put out in the.
Speaker Change: Marketplace the exceptional.
Speaker Change: Attention to detail that's out there because we know we put a product in people's bodies everyday I wish I could take you to the nutrition clubs and alongside distributors who've changed their lives dramatically by offering an economic opportunity to raise their station and like to build something incredibly special for their families for themselves to do something that.
Speaker Change: Did not have an educational pedigree.
Speaker Change: How many executives and so many companies have but to have a pedigree of hard work grit resilience people with a paternal skills to build communities. This is what herbalife is all about this is why I'm. So confident about the future of this company.
Speaker Change: Stefan for 22 years.
Speaker Change: First meetings with each other we're not always easy by any means C was strong and bold we have ideas about where the company should go and how it should go there alongside other distributors, who have always had the best ideas about distribution inside this company.
Speaker Change: All of our great ideas have come from the field and the opportunities to build better distribution of our content has been a dual purpose, but it has come from inside and outside it is coming from the marketplace and the changing nutritional habits of the world that are taking place, but what this company really encompasses is the personal experience.
Speaker Change: People have the success the change the transition they get into their lives. So transformation of weight loss the transformation of a healthy active lifestyle or building something incredibly wonderful when their lives. We're always going to need money. This is the way. The world operates in Herbalife offers a great business opportunity you are always going to need good news.
Speaker Change: For longevity for opportunity to grow for opportunity to experience our grandchildren.
Speaker Change: Have a wonderful partner in my life to go do wonderful things with out in the marketplace.
Speaker Change: We're going to continue to stay engaged and involved with herbalife emotionally physically do everything I can to work with the board that we supply the resources This company needs and Stefan and John and Troy and Henry.
Speaker Change: All of the different members of the team and Rob our new President all the things they need alongside of our distributors and all the resources they need to continue to make herbalife strong.
Speaker Change: My final word is pretty simple, it's net sales gross profit EBITDA that all those important factors in this business are on improving trends, we've got something special here, We've got a company poised for the future with a vision through Stefan and the team here, that's going to be unleashed our distributor.
Speaker Change: Over the next year, that's going to create a new herbalife and the new opportunity. So thank you all for 22 years of experience in my first walk in the doors here a month now in March of 2003 to today I've grown I understand this business I understand our company.
Speaker Change: Super proud of the way, we are leaving it in great hands of step on that Rob and the team here. So thanks you guys.
Speaker Change: You won't see me next quarter, but you will hear from the management team and let's go herbalife. Thank you.
Speaker Change: This concludes today's program. Thank you all for participating you may now disconnect.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: [music].
Yes.
Speaker Change: [music].