Transcripts
Herbalife Ltd.'s management answers for the business every quarter. These are the exchanges that explain it best — verbatim, from the call transcripts preserved in Sources. Each link opens the full transcript at that page in a new tab.
Q1 2026 Earnings Call — Q1 2026
The current state of the story: a third straight growth quarter carried by India, four acquisitions explained as one system, and an explicit statement that none of it is in guidance yet. · Open the full transcript →
How the four 2025-26 acquisitions are meant to compose into one system, with Protocol as the operating layer.
Stephan Paulo Gratziani (Chief Executive Officer): I'd like to take a moment to explain how our recent acquisitions work together to support the four core actions I mentioned earlier, with Protocol as a central operating system. Each acquisition plays a distinct role, and combined, they create greater value than any one capability alone. Let me walk you through how each contributes. Link Biosciences is a formulation and manufacturing engine. It translates insight into products by enabling us to manufacture personalized nutritional supplements in a powder format at scale, directly connecting data and recommendations to the finished product. Vionic accelerates our speed to market with a personally formulated vitamin and mineral complex, in a granule format, while broadening availability through a more accessible price point. Prüvit provides the opportunity to expand our portfolio into the ketone category with a channel-exclusive offering aligned with growing consumer interest in performance, energy, and metabolic health. It is an exciting addition to the portfolio; we will have more to share this summer. And Protocol brings it all together by providing the experience and intelligence layer. It digitizes and scales the four core actions I mentioned earlier—what to measure, what to take, what to do, and who to do it with—bringing greater precision to how distributors support and engage their customers through a more connected, data-informed experience. It translates consumer inputs and health data into actionable guidance that supports more consistent behavior change over time.
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A new leverage metric introduced mid-deleveraging, with the definition and the target stated in the same breath.
John G. DeSimone (Chief Financial Officer): Credit agreement EBITDA for the first quarter was $194 million and our total leverage ratio was 2.7x as of March 31. Beginning this quarter, we are introducing net leverage ratio as an additional metric to provide greater transparency into our leverage profile and delevering progress. We define net leverage ratio as net debt divided by trailing twelve-month credit agreement EBITDA. At the end of the first quarter, our net leverage ratio was 2.1x, and we are establishing a target to reduce net leverage to below 2x by the end of this year. We believe this metric provides a more complete view of financial flexibility because it reflects debt relative to earnings while also incorporating cash on hand.
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India's GST cut as an accidental price experiment - and the read-across management is now testing in other markets.
Chasen Louis Bender (Citi); John G. DeSimone (Chief Financial Officer): My second question is on India. Obviously very strong growth following the GST change. I am curious—given what you have seen—how has your thinking evolved on potential price reduction programs in other markets? And just as a housekeeping related to that, what are you assuming in guidance for India constant currency in the rest of the year? I know you mentioned you are expecting continued momentum, but should we expect that, or does your guidance contemplate the similar 30-plus percent growth in the rest of the year? Thanks so much. […] Yes, Chasen. I will take this. Let me break it into pieces. There is a lesson in India. We had effectively a price decrease due to the GST reduction, and that created a lot of momentum. India had started building momentum just prior to that. A couple things I want investors to know. One is that momentum has been incredibly strong. We are going to annualize the GST in September, but we do not think that means we are not going to grow after. We think the momentum carries forward. Granted, we will be comping quarters that have the GST impact, so the growth rate will moderate, but that momentum we expect to continue. That gives you a little flavor of our thinking of India. India did beat our expectations in Q1. Going forward— if I may break this into buckets—for Q2 through Q4, so the rest of the year, we basically have not changed our sales expectations from where we were in February. They have come up a little, but we had some softness in the quarter in EMEA. We are going to run some tests based on what we learned in India, and hopefully that can work. We also had a price increase in Mexico, plus there was an incremental tax in Mexico, that had a little bit of a volume impact in Mexico on the negative side. That also supports the thesis we are working with the distributors on—that price matters. I think there is a lot of opportunity for us to affect volume in the future by modifying price and modifying the commission structure. So we are running tests. We have been running tests. We are now running more tests based on the results we have seen.
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China sized and set aside: about 4% of sales, no profit contribution, and nothing from its turnaround in the forecast.
Karru Martinson (Jefferies); John G. DeSimone (Chief Financial Officer): And just lastly, when we look at China, it has been a work in progress for a while now. How should we think about that, and could you remind us where it stands today as a percentage of your sales? […] It is really small. It is under 5% of sales—about 4%—so it is relatively small. It does not really contribute to profit in any meaningful way. What I have told investors over the last few quarters is we have a lot of strategies we are going to implement in China. I would wait and see. At this point, we are not rolling in the benefits of those strategies. We are going to wait until we see the benefits. Think of China long term as a huge opportunity for us. We are super underpenetrated. The model does well in China for some of our competitors. The products do well in China. We have not found our footing yet. We are working on it. I am confident over the long term we will. You will not see it rolled into our forecast until we see it coming through in results.
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The hardest question of the call - is EMEA weakness structural? - answered with a case that the core offer has commoditised.
John Baumgartner (Mizuho Securities); Stephan Paulo Gratziani (Chief Executive Officer): And then coming back to EMEA, to drill down there a bit more, I am curious the extent to which there may be more structural change or softness in the direct selling market given the consistent declines you are seeing in sales leaders, or is it more of a productivity issue you think, or maybe some price adjustments can kickstart growth in that region? […] From a distributor lens—someone that worked in EMEA specifically, which was one of the areas that I spent a lot of time in—I think what has happened is the overall way people look at their health and wellness and make their decisions on what they are going to buy and where they are going to spend money is evolving over time. If you think historically, we started in 1980. The idea of a protein shake in 1980—and I will speak to myself—in 1991, when it came to France where I started, you had to convince someone that the idea of taking a shake instead of having breakfast was actually a thing. They would be like, "You are telling me I am going to mix this up, and I am going to drink this instead of having my coffee and croissant, and that is breakfast?" Today, we do not live in a world where a protein shake is novel and innovative. It is more of a commodity. It is an accepted form. I think part of what is happening is as the markets evolve and as technology evolves, the offer also needs to evolve.
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Post-refinancing capital allocation in two sentences: debt paydown still ranks ahead of everything else.
Douglas Matthai Lane (Water Tower Research); John G. DeSimone (Chief Financial Officer): And lastly, John, now that you have completed the debt refinancing, is there any change to your capital allocation priorities? […] There is not. My number one priority is still to get our gross debt down to $1.4 billion by 2028, which would get our net debt below $1 billion.
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Q4 and Full Year 2025 Earnings Call — Q4 FY2025
The annual framing under the new CEO - what the personalization strategy is, what rule governs the acquisitions, and how deleveraging is being paced. · Open the full transcript →
The strategy stated plainly: technology is meant to enhance the distributor relationship, not disintermediate it.
Stephan Gratziani (CEO): The human connection has always been at the heart of Herbalife. As a distributor-led nutrition company, our strength lies in th one-to-one relationships our distributors build with their customers. Our distributors take the time to understand a person's individual needs and support them throughout their healt and wellness journey. These fundamentals remain unchanged. What is changing is how we deliver them because we see a future of health and wellness that is even more personalized, datadriven, proactive and accessible. We are modernizing the experience to make it more connected and more effective. We will continue to provide curated product recommendations while laying the groundwork to deliver personally formulated nutritional supplements. Over time, this personalization will leverage data and insights from multiple inputs such as blood biomarkers and connected devices. Central to this strategy is Pro2col, our health and wellness operating system. Since acquiring the Pro2col technology in April of 2025, our focus has been on building a digital experience that supports the strength of our business, leveraging digital tools to enhance, not replace the human connection at the core of our go-to-market strategy. We've implemented a strategic phased beta rollout designed to integrate in-market insights from distributors and customers, enabling us to enhance capabilities and introduce new features in a way that drives the greatest impact.
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Two years of deleveraging quantified, with the refinancing flagged as possible and the 2028 debt target held either way.
John DeSimone (CFO): Over the last 2 years, we have paid down over $530 million of debt and reduced our leverage ratio from 3.9x to 2.8x. Our financial profile today is much stronger than it was 2 years ago; and depending on market conditions, we may consider refinancing portions of our existing debt. While there can be no assurances regarding timing or outcomes, a successful transaction could meaningfully lower our borrowing costs. Regardless of whether or not we pursue any capital structure initiatives, we remain committed to reducing our gross debt to $1.4 billion by the end of 2028.
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Guidance philosophy on regions: growth expected everywhere but China, which is pushed out to 2027.
Chasen Bender (Citi); John DeSimone (CFO): So I know you guys don't traditionally give guidance by region, but I was hoping you could do a little bit of around the world and give some more color on how you're thinking about sales for the different geographic segments in 2026. I know you called out you're expecting growth in the U.S. But if you could kind of flesh out the comments for your other geographies, especially given the really strong India results and how the GST impact should kind of flow through until we lap those changes, that would be great. […] Yes. So we don't guide by region. I do want to give maybe a little bit of commentary. It'll be very high level. I will say that we're expecting net sales growth in every region with the exception of China. China is expected more of a 2027 event. And that's about, I think, all I really feel comfortable giving out.
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Why 2026 margin expansion looks thin: no Pro2col revenue in the plan, and India's GST cut creates an unrecoverable input-tax cost.
Chasen Bender (Citi); John DeSimone (CFO): And then as it relates to Pro2col, obviously, there's a lot of excitement building around the organization on that. I was hoping you could kind of frame your expectations in terms of the sales contribution you're expecting from that program and kind of what you've assumed in 2026 guidance. And then I guess to kind of stay in the realm of guidance, just on the EBITDA side, too. You've exceeded your quarterly guidance in each of the last 8 quarters, and if my math is right, you're only guiding to 20 to 30 bps of margin expansion in '26. It seems like you've built in a lot of flexibility there. So I'm just curious to understand kind of what your assumptions are and what's driving that degree of expansion. […] So Chasen, that's a lot of questions. Let me try to address them all. On the Pro2col side, there isn't much revenue built in at this time. There's significantly more potential for growth than risk. We're currently in the beta phase, having launched commercially in the U.S. in July, and we expect gradual growth from there. We haven't integrated a lot yet, but we will start a few additional beta tests in other markets this year. However, beta testing doesn’t typically generate high volumes; it's mainly a process of acclimation and development. So again, the upside outweighs the downside risk in this area. Regarding SG&A, there is one complication related to the GST in India. A key factor driving sales in India is that the government reduced its GST rate, which is similar to a sales tax, from 18% to 5% for many of our products. This has significantly lowered prices for consumers and has been very advantageous. However, the GST rate for the services provided by our distributors and for our intercompany services remains at 18%. We previously could offset the input and output credits, but now we cannot. As a result, next year, we will face an additional cost of about $16 million from G&A and member compensation due to GST. This will have a negative impact on our bottom line. Our margins, excluding GST, would be approximately 30 basis points higher than what you see in guidance. Even so, we anticipate margin enhancement and improvement next year, which is important to note. There is a slight negative effect on the percentage due to the GST in India. Nevertheless, the GST in India is beneficial for our business as it boosts overall volume.
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How the two recruiting funnels differ, and why a 2024 incentive design tilted the mix toward distributors over customers.
Carolyn Popelka (Barclays); Stephan Gratziani (CEO): My question relates to the distributor to member model. We've seen pretty outsized distributor growth, especially on a 2-year stack. So I was wondering if you could expand on the relationship between distributor growth and members growth. I think intuitively, with the current market, you might think more people want to be distributors looking for extra income, but on the other side, people might have less discretionary income for health and wellness. So is there a mismatch there? […] Well, look, it's both. The opportunity that people are looking for to have a financial opportunity, I think we're all clear that, that remains and will continue to remain something that there's a large attraction and interest and need for. At the same time, you said it. Health and wellness and people taking care of themselves and reaching their goals and what's important to them is also a major factor. The one thing that you might see just in terms of the distributor recruiting numbers versus the preferred member numbers is that we did launch 2 years ago something that we called Herbalife Premier League, which put a bit of a focus on distributor recruiting. And when we did that, there was a little bit of a focus on distributors more than preferred customers. For the first year that we ran the program, it ended up having more of a focus on the distributors. We made an adjustment in 2025 to actually account for preferred customers because a lot of markets in their models and flows they really kind of led with preferred customers. So I think as you see those numbers, there might be some level of fluctuation. All in all, it really depends on the distributor models. We could have more preferred customers in India, it drives a lot of growth for us. It's not direct distributor recruiting that drives because it's really attuned to their model and the way that they actually build the business there. So I would say both remain highly interested and attractive, and our distributors are focused on both.
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Q2 2024 Earnings Call — Q2 2024
The best call on how Herbalife actually makes money: a live experiment in resetting price, distributor payout and qualification thresholds together, plus the debut of the $1 billion debt-paydown commitment. · Open the full transcript →
The clearest account of Herbalife unit economics: price, distributor payout and marketing-plan thresholds moved together in one market.
Chasen Bender (Citi); John DeSimone (Chief Financial Officer): And then in terms of pricing, obviously, pricing was once again a strong contributor to overall net sales growth in the quarter. But you called out this pilot program in Latin America whereby you took a reduction in that price across most countries ex Mexico. I was hoping you could expand a little bit on that. What are the benchmarks you're looking for in terms of success that would then lead you to roll that out more globally and related, what sort of timeline might we see you make those judgment calls on and subsequently roll that out to other markets? […] Yes, that's a great question. So let's start with the strategy behind the changes that we've made. Historically, at Herbalife, we've had pretty much the same approach to pricing and the compensation system to our distributors globally. And the reality is that that's not really a level playing field given that the socioeconomic differences across the 95 markets that we're in. So what we did in most of Latin America, South America, specifically and Central America was lower the price so we can reach more consumers. That was one thing. Second, lower the compensation plan earned by distributors and us, by the way, right? It's a little bit lower margin percentage for everybody. And third, actually make it easier for the distributor than to qualify going up the marketing plan because the average purchase per customer in some of the poorer countries is pretty low. And so to reach the threshold that had previously been set, they need a lot more customers than a lot of other countries do. And that creates more effort and almost an unlevel playing field. So what we're ultimately trying to do is optimize those variables within a country to maximize the earnings, and that means the earnings for the company and the earnings for distributors. So the measure for success is are we generating enough increase in volume to not only offset the price decrease, but that we're all putting more money in the bank at the end of the day by making these changes. So that's the objective. I think it's strategic. I think it's an important pillar for the future.
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The $1 billion debt-paydown commitment when it was new, with the reasoning for choosing debt over buybacks.
Hale Holden (Barclays); John DeSimone (Chief Financial Officer): $1 billion debt paydown target over the next four to five years felt like it was a new, new, new to me. Is the expectation that you guys would sort of pay as you go every quarter over the next couple of years and chip away at it or take it more in chunks? […] Well, it is new news, okay, is that we're committed to paying down $1 billion over the next four to five years. I think that was that question that's been coming up is once we pay down the 2025, what are we going to do with that free cash? Are we going to buy back stock? And we just want to make it clear. We continue at this point, given the cost of debt and the tax friction of it that we think under the current circumstances, the best option is to continue to pay down debt. So I think that's an important takeaway from the call. And I think that it just transfers value to equity holders. So I think that's a good backstop. Second, how we do that will be circumstantial. It all depends on the maturities of the debt and what the penalties are for buying back early and how much cash we're generating. So I'd like to do it quarter-by-quarter to the extent that we can and that the economics work out because the interest costs are pretty high.
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Why prices were cut: in some markets the payout structure had confined the product to the top tier of consumers.
John Baumgartner (Mizuho Securities); John DeSimone (Chief Financial Officer): And I just wanted to better understand the catalyst for this change. Were you receiving feedback that prices just became too high, whether for the category or the channel? […] Well, I think it started about 5% to 6%, maybe even more years ago and actually started from an initiative Michael pushed over to me at the time. Regarding pricing of our products in certain markets because in certain markets, our products seem to only be able to skim this top surface of consumers. And that was because of the amount of payout we had to make associated with those products. So it started with us, and it started with years of communication with our distributor leaders trying to build confidence on what we were trying to do, trying to share in the risk associated with it and recognizing that a lower price with a different payout can actually be more profitable from a dollar standpoint to them and us if we can reach to more consumers. And so I think it started out maybe from inside out, but what's happened in the recent past is it's been more outside in now pulling on those ideas.
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The margin arithmetic of the price reset: gross profit falls, contribution margin much less, because distributor payout moves with it.
John Baumgartner (Mizuho Securities); John DeSimone (Chief Financial Officer): Is the thought process, if you do scale this more broadly, I guess now it's not going to have that much of a margin impact on the overall model. But if you roll this out more broadly where it may have an impact on margins, is the thinking that with the restructuring savings you have the transformation program, you can basically sort of absorb that kind of downward reset margins without having the impact at the bottom line? Is that basically the thought process? It gives you the kind of flexibility to be more creative on the pricing? […] So I mean, I think we can more than offset it. So I think there's pluses and minus in this, right. So gross profit actually as more of these types of pilots are pushed out, then you'l see maybe a negative impact to gross profit. But you won't see nearly as negative impact to contribution margin because the payout structure to distributors also changes. And then we can reduce our SG&A. So that's kind of the plus when you think of the countries we're doing this with they’re not necessarily these big countries that make up the majority of our sales. But it does offer an opportunity to some of the smaller countries that may, in fact, be small because the pricing only reaches the top tier consumer.
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Why recruiting can turn positive while active distributor counts do not - the lag between the two, explained.
William Reuter (Bank of America); Michael Johnson (Chairman and CEO): I thought that there were active numbers in your slides that I was looking at prior to the call that the difference in the trends versus the recruiting numbers would be different. Is that not the case? […] Well, the recruiting numbers start to add on, right? So it's cumulative over time. So if you're bringing in x-amount one month and you're adding another group the next month, the next month, and the activity rate actually is those that are stopping being active and those that are joining that are starting to be active. So we didn't specifically talk about that. But what ends up happening is when you've had those 12 quarters of decline in recruiting, there's a tail to it, right? So you actually have less and less people over time, now we're starting to add in, and that's why we make the comment that one quarter is the beginning of the journey. What ends up happening is that you end up having as you add on consecutive quarters and consecutive months you'll reach the inflection point, right? There will be this time at which kind of the consecutive 12 quarters kind of starts to run out and then all the add-on meets at that point. And that's the inflection point. And so you may not be seeing it driving now in the overall total active numbers, but eventually, that point will come.
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Q4 and Full Year 2023 Earnings Call — Q4 FY2023
The reset call - nutrition-club economics disclosed for the first time, the GLP-1 position settled, and a flat-year guide with the reasoning behind it. · Open the full transcript →
Pressed on how high club conversion can go, management ties it to service mix rather than promising a number.
John Baumgartner (Mizuho Securities); Stephan Gratziani (President): And then as a follow-up, your comments on the preferred conversion rates in the U.S. Nutrition Clubs, I think I heard the spread was like 1% to 10%. And I'm curious, I know it's very early days and it's a pretty wide network, but I guess how do you think about where that spread should be? Is 10% at the high end too low?
Can it be 20%, 30%? I'm just sort of curious like what you would think is sort of achievable going forward as you implement these sort of resources. […] Yes, so it's really kind of model-based, right? By the way, we give 10%. There's over 10%, okay? It's not the majority of people. Obviously, it's a small subset of people.
But when we actually break it down, it could be their demographics, where they're living. It could be, and most of the time is, the models that they're doing and the services that they're offering. So, if it's just foodservice, for example, the conversion, we know is much lower, they're more focused. There are maybe higher-volume clubs where they have more customers coming in and out, and they are just doing everything that they can to make sure the customers get the service that they need to buy the food item that they're trying to purchase and be on their way. Other clubs, they have better conversion.
People are coming in. What they're coming in for could be a variety of things. They might be coming in, some of these clubs have workouts that are happening a couple of times a week. Some of the clubs, people are doing wellness evaluations. Some of the clubs, they're running challenges where they'll have weekly meetings, and they'll have groups of people that are coming in.
Those types of clubs have higher conversion. So, we believe long term that the more people focus on multi-services, the higher the conversion is going to go.
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The GLP-1 answer that set the company's position: no drug, no corporate partnership, complementary product sold locally.
Linda Bolton-Weiser (D.A. Davidson); Michael Johnson (Chairman and CEO): And then just in terms of the GLP-1 stuff that you talked about, that's very clever that they're reaching out to prescription providers to look for clients. I'm just wondering if you're in the works for doing something more formalized, some sort of partnership where you can actually partner with a GLP-1 provider to get a funnel of kind of customers? Is that something you're thinking about? […] Linda, it's Michael. I've been waiting for that question from you. So, we have studied this really carefully. And we've looked at health care providers, telehealth. We've gone back and forth on it.
We think the best method to the marketplace for this is to work locally, is to work with the opportunity for our distributors to work with longevity clinics, work with doctors, work with different areas in their local marketplaces to provide a product that's complementary. We don't see ourselves in the near future offering a GLP-1 product. We believe that our strength is in the behavioral modification, giving product to people that complements a GLP-1 user on their journey. As you know, you're on that personal journey. And so, that opportunity for us is – the beauty of this is to build a long-term customer who will use the GLP-1s on a temporary basis and to work with local opportunities, whether it's a health care provider, whether it is a telehealth company on a local basis, through our distributors and not on a corporate relationship.
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Capital allocation gated on leverage: 3x is the target, and buybacks are off the table until it is reached.
Douglas Lane (Water Tower Research); Alexander Amezquita (Chief Financial Officer): So, have you articulated a target leverage ratio that you're shooting for? And then is there some point where a stock buyback makes sense? […] So, our policy around 3x total debt is still our target. That is an investment-grade target. We are – our excess cash flow right now, we ended 2023 at 3.9x. So, our excess cash flow is going to continue to pay that debt down until at least we get to the 3x target. And we have plans to get there with the continual paydown of the free cash flow generation. […] Well, we need to get the 3x target before we can ever consider that. But again, Doug, our focus right now is getting our debt levels significantly lower than where they are today.
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Q3 2022 Earnings Call — Q3 2022
The call where the thesis broke: guidance withdrawn, the CEO returning for a third time, and management conceding it could not separate price effects from macro effects. · Open the full transcript →
The guidance withdrawal itself, and the reason given: consumer behaviour moving faster than the company could forecast.
Alexander Amezquita (Chief Financial Officer): And sixth, while we anticipate trends that emerged in the third quarter to persist into the fourth quarter, we are not able to forecast in an environment with such rapidly shifting consumer behaviors and volatility in the world at large. As such, the company is withdrawing fiscal year '22 guidance. We will revisit our ability to provide 2023 guidance at our next earnings call in February.
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Why pull guidance with two months left - the answer points to distributor productivity, not just macro headlines.
Chasen Bender (Citi); Alexander Amezquita (Chief Financial Officer): Can you maybe just expand on the rationale for why you're withdrawing guidance? I mean, I get the macro is tough and there's the lockdown in China, conflict in Ukraine, inflation pressures, you name it, but these aren't new issues per se. And with just two months left in the year, I guess I'm wondering, why pull guidance now? And what does this really mean in terms of your ability to forecast the business? […] Yes, so it's a good question. So while a lot of the headlines aren't necessarily new, we've been dealing with the pandemic, the fallout of the pandemic, the issues around the supply chain, all of those are largely new. What we have seen through the third quarter is a pretty dynamic shift in consumer behavior and purchasing behavior. As you know, largely, we've been focused on active sales leaders and the introduction of new distributors and preferred customers as key KPIs throughout the year.
But what we saw in the third quarter was a reduction in productivity in it as well. And so what appears, and again, this is just Herbalife Nutrition data, I'm not suggesting this is broadly, but perhaps is that these macroeconomic conditions, or I should say, the change is impacting consumer behavior beyond the ability for us to forecast.
Again, we're seeing productivity down, which suggests a reduction in buying behavior, whether that's a swapping out for other goods, whether that's just simply supply – saving dollars for energy purchases and other critical nondiscretionary purchases is unclear at this moment as we're looking through the data.
But clearly, there has been a shift through the quarter and our inability to really forecast these shifts just leads to our inability to forecast how Herbalife Nutrition is going to behave in that environment.
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The counter-cyclical case for the model, stated carefully: a weaker labour market can help a push-based income opportunity.
Jeffrey Van Sinderen (B. Riley); Alexander Amezquita (Chief Financial Officer): But overall, just interested to hear if you think you – maybe you have to put some pieces in place for the but do you think you can grow the business in the face of recession? Or do you think that, that's more likely a return to growth or year-over-year growth exiting a recession? […] Jeff, this is Alex. I'll take that one. Good talking with you. So we do believe that we have the ability to grow during a recession. Now obviously, we have to get the right strategic initiatives in place. But we have the history of being able to do something, to grow during recessionary periods. We've referenced a lot on this call about the macroeconomic challenges. And I want to make a distinction between your question and sort of what we're facing.
So currently, these current macroeconomic challenges are still faced with things like a tight labor market, are still faced with a pricing transition that's affecting consumer sentiment. Those are all significant headwinds, obviously, to almost any business. To the extent that you have some stabilization there to the extent even if you have some weakening of the labor market, those sorts of activities could play to our favor.
Historically, our distributors have had the mantra or have had the motivation to get out there and help people find an extra income opportunity at times when they were looking for. So the motivation, our model being a push model where distributors get out there and have certain motivations at time to create that extra sale. Recessionary times, people looking for extra income, those types of – that type of environment actually could benefit us.
And so obviously, we have to see how things play out. There's a lot transitioning in the moment, and it's hard to – that's why we withdrew guidance. It's a little hard to forecast when that might be. But I just want you to simply take away, recessionary times do not necessarily mean that there isn't an opportunity for us to grow. We could potentially grow in those environments, provided we get the right strategies and we get the right motivations out there in the field.
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The pandemic-cohort thesis abandoned: newer and tenured distributors were now behaving the same way.
Karru Martinson (Jefferies); Alexander Amezquita (Chief Financial Officer): Last quarter and the quarters before, we talked about there was the pandemic cohort who was not engaging, your longer-term distributors were still putting up good metrics. Is this kind of pulling of guidance now saying that those two groups have kind of merged together? Or is there still a difference between the two groups? […] Karru, great question. Our Q3 results have shown exactly that but those two groups have effectively merged. We're not seeing a material difference from them at this point and the productivity comments that we've made and just generally the trends of pre-pandemic, pandemic, and I'm not quite sure if you say post-pandemic quite yet, but really all cohorts are trending in line.
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Asked to separate the June price increase from the macro, management says the data cannot attribute it - an honest limit.
Hale Holden (Barclays); Alexander Amezquita (Chief Financial Officer): My second question was I mean, if I'm just sort of listening between the lines here, it sounds like some of the pricing that you took over the summer, combined with the macro environment, has sort of driven those productivity declines sort of getting worse month, month-to-month through the third quarter. And I was wondering if you thought my comment on the pricing was correct or if it was just something else. […] Well, so we saw the reduction in demand. That's clear and evident in the data. We have our data scientists that run through the performance on a month-to-month basis and we could see the reduction in demand. Now what's challenging is those results, whether it's due to the pricing increase, whether it's due to the macroeconomic conditions, the results are the same. So you can't – it's hard to give attribution to 1 of those 2 things in any sort of – with any sort of specificity.
Further, I think as you go region by region and market, that's going to vary. What's working in the U.S. is probably different in Europe. It's probably different in Asia Pacific, so on and so forth. So I think your comment is generally right. It has had – pricing has had some impact. But to sort of quantify the specific amount of demand elasticity that we've seen in the third quarter, we don't have the data to really suggest with any precision.
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