Herbalife Q1 2025 slides: Strategic acquisitions drive personalized nutrition push

Herbalife Nutrition Ltd (NYSE:HLF) reported its first quarter 2025 results on April 30, highlighting strategic acquisitions in the personalized nutrition space while delivering improved profitability despite currency headwinds. The company’s stock rose 1.67% in after-hours trading following the announcement, reaching $7.32.

Quarterly Performance Highlights

Herbalife reported net sales of $1.2 billion for Q1 2025, down 3.4% year-over-year but up 1.4% on a constant currency basis, meeting the midpoint of the company’s guidance range. Foreign exchange headwinds had a significant 480 basis point negative impact on reported results.

The company’s profitability metrics showed notable improvement, with adjusted EBITDA reaching $165 million, up 19% compared to Q1 2024. Adjusted EBITDA margin expanded 260 basis points to 13.5%, demonstrating enhanced operational efficiency.

"Our purpose is to impact humanity’s health and wellness," stated incoming CEO Stefan Graziani, who will assume the role effective May 1, 2025, emphasizing the company’s commitment to innovation and consumer health.

As shown in the following financial highlights:

The company’s earnings per share of $0.59 significantly outperformed analyst expectations of $0.40, representing a 47.5% positive surprise. Gross profit margin improved to 78.3%, up 80 basis points from the prior year.

A closer examination of the sales performance reveals that pricing increases (+$46.3M) and favorable country mix (+$4.1M) more than offset volume declines (-$29.3M) before accounting for the substantial FX impact (-$60.5M):

Strategic Acquisitions & Digital Transformation

Herbalife made significant strategic moves during the quarter, completing three acquisitions aimed at positioning the company at the forefront of personalized nutrition and wellness trends. The company invested $25.5 million in cash for these acquisitions, with additional contingent payments possible based on future performance.

The acquisitions include Pro2col Health LLC (a digital health application company), Pruvit Ventures (a direct seller of ketone supplements with approximately 19,000 independent distributors across 37 countries), and a 51% ownership stake in HBL Link Bioscience LLC, which acquired assets of Link BioSciences Inc. (a personalized nutrition manufacturing company).

These strategic investments are detailed in the following slide:

The company is leveraging these acquisitions to develop a comprehensive personalized wellness platform, with a beta launch scheduled for July 2025 and a commercial release in Q4 2025 in the US market. The platform will integrate data and biometrics, digital health tools, personalized supplements, and community coaching features.

The following diagram illustrates the integrated approach of the new wellness platform:

Regional Performance

Herbalife’s performance varied significantly across regions, with Latin America showing the strongest growth at 11% in local currency despite a 4% decline in reported terms. EMEA and Asia Pacific regions delivered modest growth of 3% and 2% in local currency, respectively, while North America declined 4% and China decreased 13% in local currency.

The regional breakdown of net sales performance is illustrated here:

Operational metrics showed encouraging trends, with new distributor growth of 16% worldwide and active non-sales leaders increasing by 8%. The company reported approximately 47,000 attendees at Extravaganza training events held in China and India in April, demonstrating continued engagement in its direct selling network.

The distributor growth metrics by region are shown in the following chart:

Financial Position & Capital Structure

Herbalife continued to strengthen its balance sheet during the quarter, repaying $70 million of debt, including $65 million of 2025 Notes redeemed in February. The company reduced its total leverage ratio to 3.0x as of March 31 and maintained $329 million in cash on hand.

CFO John DiSimone highlighted the company’s commitment to further debt reduction, stating, "We remain focused on reducing our debt to $1.4 billion by the end of 2028." The company’s approximately $400 million revolving credit facility remained undrawn at the end of the quarter.

The adjusted EBITDA bridge below shows the factors contributing to the 19% year-over-year improvement:

Forward Guidance & Outlook

For the second quarter of 2025, Herbalife expects net sales to range from a 3.5% decline to a 0.5% increase year-over-year, with adjusted EBITDA projected between $160-170 million. Capital expenditures are expected to be $25-35 million for the quarter.

The company’s full-year 2025 guidance projects net sales between a 2.5% decline and a 2.5% increase, with constant currency net sales growth of 0.5% to 5.5%. Full-year adjusted EBITDA is expected to range from $625-655 million, with capital expenditures of $90-120 million.

The detailed guidance is presented in the following outlook table:

Herbalife’s strategic focus on personalized nutrition through its recent acquisitions, combined with improved profitability metrics and continued distributor growth, positions the company to navigate ongoing currency challenges while pursuing its digital transformation initiatives. The leadership transition to Stefan Graziani comes at a pivotal moment as the company executes on its personalized wellness strategy.

Full presentation:

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