Herbalife Nutrition reports highest Q1 volume points in company history

Excluding China, volume points increased 10% compared to the prior year period.

Herbalife Nutrition has reported financial results for the first quarter ended March 31, 2019:

“In the first quarter of 2019, the momentum of our geographically diverse business continued with net sales growth in four of our six regions. We are confident that our strategies will drive volume growth in 2019,” said Michael O. Johnson, Chairman and CEO of Herbalife Nutrition.

QUARTER HIGHLIGHTS

• Reported net sales of $1.2 billion included growth in four of our six regions and was approximately flat compared to first quarter 2018. Excluding China, net sales increased 6% compared to the first quarter 2018.
• Volume points of 1.5 billion increased 6% compared to the prior year period¹, the highest first quarter in Company history. Excluding China, volume points increased 10% compared to the prior year period.
• First quarter reported diluted EPS of $0.66 and adjusted² earnings of $0.66 per adjusted³ diluted share, both of which were negatively impacted by expenses of approximately $0.7 million or $0.00 per diluted share and adjusted³ diluted share, respectively, related to the China Growth and Impact Investment Program.

• In mid-April, the Chinese government concluded a 100-day review of the health products industry, which led to a significant decrease in company and service provider meetings during the first quarter. While the Company and service providers are proceeding in a methodical manner, local government approvals for meetings in May are ramping up significantly and meetings have already begun.

• Due to this recent slowdown in China, the Company is revising full year 2019 volume point guidance to a range of 0.5% – 6.5% growth, net sales guidance to a range of (1.0%) – 5.0%, as well as reported and adjusted^1,3 diluted EPS guidance to a range of $2.19 – $2.64 and $2.50 – $2.95, respectively.

¹ Excluding adjustments to volume point values in 2018, the year over year change would have been an increase of 5.6%. See Regional Volume Point Metrics below.

² Adjusted diluted EPS is a non-GAAP measure and, for guidance purposes, excludes the impact of: non-cash interest expense associated with the Company’s convertible notes and expenses related to regulatory inquiries. Adjusted diluted EPS for reported results purposes, excludes the impact of the foregoing as well as impacts relating to contingent value rights revaluation, insurance recoveries and China grant income. See Schedule A – “Reconciliation of Non-GAAP Financial Measures” for a detailed reconciliation of adjusted net income to net income calculated in accordance with GAAP and a reconciliation of adjusted diluted EPS to diluted EPS calculated in accordance with GAAP and a discussion of why we believe these non-GAAP measures are useful.

³ See Schedule A – “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of adjusted diluted share count to reported diluted share count and a discussion of why the share count has been adjusted for purposes of calculating adjusted diluted EPS for the first quarter of 2019 and second and full year 2019 guidance.