Herbalife Nutrition Ltd. Q1 FY2026 earnings call

• Delivered strong start to 2026 with net sales and adjusted EBITDA exceeding guidance. - Building a more connected, personalized approach to health and wellness. - Completed debt refinancing, expecting ~$45 million annual cash interest savings. - Announced acquisition of Vionic's core personalized nutrition business, with Vionic's products to be offered in Europe in June and U.S. in July. - Rollout of new packaging across global product portfolio beginning in March, expected to be substantially completed by 2027. - Kicked off first Extravaganza events of the year, starting in India, with more events to come in various regions. - Over the past two years, stabilized net sales, returned to growth, expanded adjusted EBITDA margins, strengthened balance sheet, reduced debt, and completed strategic acquisitions.

First quarter net sales were $1.3 billion, up 7.8% year-over-year and up 5.4% on a constant currency basis. Adjusted EBITDA was $176 million. India achieved record quarterly net sales for the second consecutive quarter. Regionally, Asia Pacific had 17% year-over-year reported net sales growth, Latin America had 17% year-over-year reported net sales growth, EMEA had 1% year-over-year reported net sales growth, North America had 3% year-over-year net sales decline, and China had 12% year-over-year reported net sales decline. Revenue contribution: India's net sales were a significant part, with record sales in Q1.

• Second quarter expected net sales: reported 1.5% - 5.5% year-over-year increase, constant currency 1% - 5% year-over-year increase; adjusted EBITDA $150 million - $170 million on both reported and constant currency basis. - Full year expected reported net sales increase 1.5% - 5.5% year-over-year; constant currency net sales increase 1% - 5% year-over-year; adjusted EBITDA $675 million - $705 million on both reported and constant currency basis. - India GST-related net incremental cost expected to be ~$20 million - $25 million headwind to full-year adjusted EBITDA. - Preliminary estimate of impact of higher oil prices. - Capital expenditures expected $50 million - $80 million for full year, capitalized SaaS implementation costs $35 million - $55 million. - Full-year adjusted effective tax rate expected ~30%.

Q: About Protocol, could you discuss behaviors seen from U.S. beta group and how they are shaping up?

A: Beta phase continues, getting feedback, enlarged beta phase as more countries are included, Protocol is an end-to-end solution not yet rolled into forecast.

Q: On India, how has thinking evolved on potential price reduction programs in other markets and guidance for India constant currency?

A: India had strong growth due to GST reduction, momentum expected to continue, running tests based on India results for other markets.

Q: On higher oil costs, how flowing through to consumer?

A: Not flowing through, absorbing it for rest of year.

Q: On China, how to think about it and its percentage of sales?

A: China is under 5% of sales, work in progress, strategies being implemented.

Q: On Protocol launch in nutrition clubs and packaging redesign feedback?

A: Early in nutrition clubs, packaging redesign initial feedback positive from research.

Q: On transition of preferred members to new e-commerce platform and interaction with Protocol?

A: Very early, uptake on subscriptions for preferred customers is positive.

Q: On personalized nutrition segmentation and distributor feedback?

A: Vionic acquisition helps hit different price points, personalized nutrition is part of strategy.

Q: On EMEA direct selling market softness?

A: Markets evolving, offer needs to evolve with technology.

Q: On U.S. market participation in diabetes prevention program?

A: Pilot, not having material impact.

Q: On Vionic products in Europe and U.S., product offerings, rebranding, Link Biosciences product timeline, and capital allocation priorities post debt refinancing?

A: Vionic products essentially same in both markets, Link Biosciences product out in Q1 next year, four acquisitions connected, capital allocation priority still to get gross debt down to $1.4 billion by 2028.