Herbalife Nutrition Announces First Quarter 2022 Results and Updates Full Year 2022 Guidance LOS ANGELES--(BUSINESS WIRE)

LOS ANGELES--(BUSINESS WIRE)--May 3, 2022--Herbalife Nutrition Ltd. (NYSE: HLF) today reported financial results for the first quarter ended March 31, 2022.

"We have implemented several new sales initiatives across the Company designed to achieve net sales growth in the fourth quarter, while at the same time we are instituting incremental pricing actions and cost control measures," said John

Agwunobi, Chairman and CEO of Herbalife Nutrition.

First quarter 2022 net sales of $1.3 billion, an 11.0% decrease compared to the first quarter 2021. On a two-year stack basis, first quarter net sales grew 5.8% compared to the first quarter 2020.

First quarter 2022 reported diluted EPS of $0.96 and adjusted1 diluted EPS of $0.99, compared to first quarter 2021 reported and adjusted1 diluted EPS of $1.33 and $1.42, respectively.

First quarter 2022 reported net income of $98.2 million2 and adjusted1 EBITDA of $185.6 million.

During the first quarter, the Company repurchased approximately 2.6 million shares for a total purchase price of $101.7 million.

Updating full year 2022 net sales guidance range to down (10.0%) to (4.0%), adjusted3 diluted EPS guidance range to $3.50 to $4.00, and adjusted3 EBITDA guidance to $680 million to $740 million.

In response to inflationary pressures, the Company announces margin improvement initiatives, including incremental pricing actions and cost control measures.

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1 Adjusted diluted EPS and adjusted EBITDA are non-GAAP measures. See Schedule A - "Reconciliation of Non-GAAP Financial Measures" for a detailed reconciliation of these measures to the most directly comparable GAAP measure, and

a discussion of why we believe these non-GAAP measures are useful.

2 The previously reported 2021 net income of $447.2 million was the highest since 2013.

3 Adjusted diluted EPS and adjusted EBITDA are non-GAAP measures. See the "Outlook" discussion below and the related footnotes and Schedule A - "Reconciliation of Non-GAAP Financial Measures" for additional information regarding

adjusted diluted EPS and adjusted EBITDA guidance.

MANAGEMENT COMMENTARY

Herbalife Nutrition reported net sales of $1.3 billion for the first quarter of 2022, a decrease of 11% compared to the prior year. Volume points for the quarter declined 7.0% compared to the prior year, which was 50 basis points below the

midpoint of the Company s Q1 guidance range of down 9.5% to down 3.5%. The bridge between volume point and net sales guidance and results was driven by the unfavorable impact of foreign exchange rates during the quarter, as well as a shift in

the geographic mix of revenue, compared to company projections.

Reported EPS for the first quarter was $0.96 and adjusted1 earnings per diluted share was $0.99, at the high-end of the Company s guidance range of $0.80 to $1.00. Net income during the quarter was $98.2 million, resulting in

adjusted1 EBITDA of $185.6 million, just above the Company's guidance range of $165 to $185 million.

Looking to the future, the Company is updating its outlook for the year. For the full year, the Company is lowering net sales guidance to be in the range of down 10.0% to down 4.0%. Despite this reduction, the Company anticipates net sales

will be flat in the back half of 2022, and will return to year-over-year net sales growth in the fourth quarter.

The Company has identified that, as a group, the behavior of distributors that joined the business during the pandemic has departed from historical trends and is below the Company's expectations. This slowdown is primarily isolated to the

collective performance of that group, while distributors that joined the business pre-pandemic, and the entirety of the Company's preferred customer base continue to order at historical levels.

The Company believes that the return of in-person events could act as a catalyst. Most of the Company s distributors that joined the business during the pandemic have never been to an in-person event, and there is no substitute for

gathering in person for learning, collaborating and motivating.

"The interactive discussions, the face-to-face team building and the social elements that are characteristic of our in-person events are not only an important source of training, motivation, and inspiration for our distributors, but also

strengthen the social fabric that our business thrives on," said Chairman and CEO John Agwunobi.

In addition to the return of in-person sales events, the Company has implemented numerous sales initiatives at a local level that are all aimed at driving increased engagement in the business.

The Company is also taking meaningful steps to improve margins, through both pricing actions and cost controls. The Company implemented price increases in the majority of markets in the first quarter, and will take incremental pricing

actions during the second quarter in response to the dramatic increase in input and freight costs. Additionally, the Company is implementing short-term and long-term cost control measures.

These actions are in addition to the previously announced transformation program to optimize global processes for future growth, which is also expected to improve margins through productivity and efficiency enhancements within the business.

As previously disclosed, the Company expects the first phase of the program to result in annual incremental savings in the range of $10 million to $15 million, with some savings beginning in 2022. The Company is also looking to accelerate the

second phase of the program to begin in late 2022 with expected ongoing annualized savings in the same magnitude as phase one.

"While organic sales growth remains our top priority, we are working on multiple fronts to improve our margin profile that supports our strong operating model, which has delivered powerful cash flow over the years," said CFO Alex Amezquita.

First Quarter 2022 Key Metrics

Regional Net Sales and Foreign Exchange ("FX") Impact

(a) Growth/decline in net sales excluding the effects of foreign exchange is based on "net sales in local currency," a non-GAAP financial measure. See Schedule A - "Reconciliation of Non-GAAP Financial Measures" for a discussion

of why we believe adjusting for the effects of foreign exchange is useful.

Regional Volume Point Metrics

Following is the Company's second quarter and updated full year 2022 guidance based on current business trends:

Currency Fluctuation in Guidance

Guidance is based on the average daily exchange rates for the first two weeks of April 2022.

For the second quarter 2022, net sales guidance includes a projected currency headwind of approximately 270bps, adjusted(a)(b) diluted EPS guidance includes a projected currency headwind of approximately $0.07 per diluted

share, and adjusted(a)(b) EBITDA guidance includes a projected currency headwind of approximately $9 million, all versus the second quarter 2021.

For the full year 2022, net sales guidance includes a projected currency headwind of approximately 230bps, adjusted(a)(b) diluted EPS guidance includes a projected currency headwind of approximately $0.23 per diluted share,

and adjusted(a)(b) EBITDA guidance includes a projected currency headwind of approximately $29 million, all versus the full year 2021.

Net sales, adjusted(a)(b) diluted EPS, and adjusted(a)(b) EBITDA represent projections translated into US dollars at currency rates equal to the average rates used to translate 2021 second quarter and full year net

sales and diluted EPS and adjusted for items such as hedging gains/losses to be directly comparable to 2021 values. See our Company's Form 10-K for the year ended December 31, 2021 and Schedule A - "Reconciliation of Non-GAAP Financial

Measures" for a discussion of why we believe adjusting for the effects of foreign exchange is useful.

Share Repurchase in Guidance

With respect to guidance, the Company has assumed $50 million in share repurchases will be completed per quarter.

(a) Excludes the following items that cannot be accurately predicted: any future potential ongoing tax effects from the exercise or vesting of equity awards that could impact the Company's tax rate due to the stock compensation

accounting standard, as well as any future potential dilution from the Company's convertible notes due in 2024.

(b) Adjusted diluted EPS and adjusted EBITDA guidance are non-GAAP measures and exclude potential charges or gains that may be recorded during the applicable period, such as, among other things, loss contingencies, gain/loss on

debt extinguishments and refinancing, tax charges relating to tax law changes, net expenses related to the COVID-19 pandemic, and other unanticipated charges and events. The Company does not provide reconciliations of forward-looking non-GAAP

Adjusted diluted EPS and adjusted EBITDA guidance to net income, the comparable GAAP measure, because the impact and timing of these potential charges and gains cannot be determined without unreasonable efforts due to their inherent

historical variability, complexity, and unpredictability. These items, which are necessary for a presentation of the reconciliation to GAAP, could have a potentially significant impact on the Company's GAAP results.

Earnings Conference Call

Herbalife Nutrition senior management will host an investor conference call to discuss its recent financial results and provide an update on current business trends on Tuesday, May 3rd, 2022, at 2:30 p.m. PT (5:30 p.m. ET).

The dial-in number for this conference call for domestic callers is (833) 962-1459, and (956) 394-3596 for international callers (conference ID: 8987991). Live audio of the conference call will be simultaneously webcast in the investor

relations section of the Company's website at http://ir.Herbalife.com.

An audio replay will be available following the completion of the conference call in MP3 format or by dialing (855) 859-2056 for domestic callers or (404) 537-3406 for international callers (conference ID: 8987991). The webcast of the

teleconference will be archived and available on Herbalife Nutrition's website.

About Herbalife Nutrition Ltd.

Herbalife Nutrition (NYSE: HLF) is a global nutrition company that has been changing people's lives with great nutrition products and a business opportunity for its independent distributors since 1980. The Company offers science-backed

products to consumers in 95 markets by entrepreneurial distributors who provide one-on-one coaching and a supportive community that inspires their customers to embrace a healthier, more active lifestyle. Through the Company's global campaign

to eradicate hunger, Herbalife Nutrition is also committed to bringing nutrition and education to communities around the world.

For more information, please visit IAmHerbalifeNutrition.com.

Herbalife Nutrition also encourages investors to visit its investor relations website at ir.herbalife.com as financial and other information is updated and new information is posted.

Forward-Looking Statements

This release contains "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although we believe that the expectations reflected in any of our

forward-looking statements are reasonable, actual results or outcomes could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any

forward-looking statements, are subject to change and to inherent risks and uncertainties, many of which are beyond our control. Additionally, many of these risks and uncertainties are, and may continue to be, amplified by the COVID-19

pandemic. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in or implied by our forward-looking statements include the

the potential impacts of the COVID-19 pandemic on us; our Members, customers, and supply chain; and the world economy;

our ability to attract and retain Members;

our relationship with, and our ability to influence the actions of, our Members;

our noncompliance with, or improper action by our employees or Members in violation of, applicable U.S. and foreign laws, rules, and regulations;

adverse publicity associated with our Company or the direct-selling industry, including our ability to comfort the marketplace and regulators regarding our compliance with applicable laws;

changing consumer preferences and demands and evolving industry standards, including with respect to climate change, sustainability, and other environmental, social, and governance, or ESG, matters;

the competitive nature of our business and industry;

legal and regulatory matters, including regulatory actions concerning, or legal challenges to, our products or network marketing program and product liability claims;

the Consent Order entered into with the FTC, the effects thereof and any failure to comply therewith;

risks associated with operating internationally and in China;

our ability to execute our growth and other strategic initiatives, including implementation of our transformation program and increased penetration of our existing markets;

any material disruption to our business caused by natural disasters, other catastrophic events, acts of war or terrorism, including the war in Ukraine, cybersecurity incidents, pandemics, and/or other acts by third parties;

our ability to adequately source ingredients, packaging materials, and other raw materials and manufacture and distribute our products;

our reliance on our information technology infrastructure;

noncompliance by us or our Members with any privacy laws, rules, or regulations or any security breach involving the misappropriation, loss, or other unauthorized use or disclosure of confidential information;

contractual limitations on our ability to expand or change our direct-selling business model;

the sufficiency of our trademarks and other intellectual property;

product concentration;

our reliance upon, or the loss or departure of any member of, our senior management team;

restrictions imposed by covenants in the agreements governing our indebtedness;