Herbalife Nutrition, after experiencing distributor activity levels that were lower than expected, has decreased its net sales expectations for the third quarter and full year of 2021. Third quarter net sales growth is now expected to reside between approximately 14-18% over the same quarter of 2019 and growth for the full year will be between approximately 19-23% over the full year 2019.
Sales leaders actively selling in the channel were up 10% in July and August, compared to the same months in 2020 and the company expects to repurchase more than $200 million in shares during the third and fourth quarters.
“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,” said John Agwunobi, CEO, Herbalife Nutrition. “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.”
In spite of this adjusted guidance, the company is still on track for a second consecutive record-year, with full-year net sales growth between 4.5%-8.5%. This adjustment reflects a reduced midpoint of 400 basis points as compared to previous full year 2021 guidance.
Revised third quarter guidance also includes a net sales decline in the range of 6.5%-3.5%, lowering the midpoint by 700 basis points as compared to previous third quarter guidance. Full year 2021 adjusted diluted EPS guidance is now in a range of $4.55-$4.95, decreasing the midpoint by $0.15. Previously, the adjusted full year EBITDA was projected to be $875-$935 million, but has now been reduced to $860-$910 million.