Herbalife at MicroCap Rodeo Conference: Strategic Growth and Innovation

On Wednesday, 04 June 2025, Herbalife Nutrition Ltd. (NYSE:HLF) presented its strategic initiatives at The MicroCap Rodeo Conference - NYC. The discussion highlighted the company’s focus on personalized nutrition and its plans for debt reduction, amidst challenges such as market undervaluation and operational shifts. Herbalife’s leadership remains optimistic about future growth, leveraging consumer data and innovative technologies.

Key Takeaways

• Herbalife aims to reduce its debt by $1 billion by the end of 2028.
• The company is expanding into personalized nutrition through acquisitions and technology.
• CEO Stefan Gratzinger, a former top distributor, leads the strategic initiatives.
• Herbalife’s stock is perceived as undervalued, with improving margins and sales growth expected.
• The company is actively searching for a CTO with AI expertise to enhance efficiency.

Financial Results

Herbalife reported an annual net revenue of approximately $5 billion, operating in over 90 countries with over 2 million distributors. The company’s EBITDA margin has shown improvement, from 11.3% in 2023 to 13.4% in the most recent quarter. Herbalife’s leverage ratio stood at 2.97 at the end of Q1 2025, with a strategic focus on reducing this through debt repayment.

Operational Updates

Herbalife’s global network includes approximately 65,000 nutrition clubs, with 9,500 in the US alone. These clubs play a crucial role in the company’s daily consumption model, accounting for 40% of US sales. Over 4 million customers visited US clubs in the past year, underscoring the model’s success.

Future Outlook

Herbalife is committed to using excess cash for debt reduction, aiming to decrease its debt by $1 billion by 2028. The company anticipates a return to sales growth, driven by improving margins and strategic investments in personalized nutrition. Leveraging AI and consumer data is a key focus to enhance distributor support and internal efficiency.

Q&A Highlights

The conference call addressed Herbalife’s search for a CTO with AI expertise, emphasizing the importance of technology in driving efficiency and supporting sales efforts. The leadership team, including CEO Stefan Gratzinger and Executive Chairman Michael Johnson, is dedicated to advancing the company’s strategic goals.

For a more detailed understanding, readers are encouraged to refer to the full transcript.

Full transcript - The MicroCap Rodeo Conference - NYC:

John Heffernan, Emcee, New York Rangers: Good morning, ladies and gentlemen. You are looking live. Spark Steakhouse, New York City, New York. I’m John Heffernan. I’ll be one of the emcees today.

I’m an announcer for the New York Rangers amongst some other pleasantries here in the city. Don’t know a whole lot about finance, but it’s awesome to be here. I see, the Herbalife folks behind me also might be acting as sommeliers later in the day. If you wanna get, some wine requests in, now would be a good time to do it. All joking aside, folks, we have a full day of presentations.

Track one is this room. Track two across the hall there to my left. We are delighted that you are here today, and I wanna officially welcome you to the two thousand twenty five MicroCap Rodeo. In my boxing and MMA, ring announce her best. I’ll also say, and for those in attendance and the millions watching around the world, I wanna give a big shout out to our webcast.

All of our listeners, welcome officially. We are so glad you have joined us. So without further ado, everybody, I’m gonna turn it over to Erin Banis Banias, I should say, the head of investor relations for Herbalife Ltd. Take it away, Erin.

Erin Banias, Head of Investor Relations, Herbalife Ltd.: Good morning, everyone. Whether you’re joining us here in person or participating remotely via our webcast, we are glad you are with us. I’m Erin Banias, head of investor relations at Herbalife, and it is my pleasure to welcome you today. We are pleased to be joined by John DeSimone, Herbalife’s Chief Financial Officer and Doug Lane, Water Tower Research’s Head of Consumer Products. Before we begin today’s fireside chat, I would like to direct you to our cautionary statements regarding forward looking statements included in our most recent Form 10 Q filing and earnings release, which are both available under the Investor Relations section of Herbalife’s website.

The Form 10 Q and earnings release include a discussion of some of the more important factors that could cause results to differ from those expressed in any forward looking statement within the meaning of the Private Securities Litigation Reform Act of 1995. As is customary, the content of today’s fireside chat will be governed by this language. In addition, during today’s fireside chat, we may discuss certain non GAAP financial measures. These non GAAP financial measures exclude certain unusual or nonrecurrent items that management believes impact the comparability of the periods referenced. Please refer to our historical earnings releases and presentation materials available under the Investor Relations section of Herbalife’s website for additional information regarding these non GAAP financial measures and the reconciliations to the most directly comparable GAAP measure.

And with that, I will now turn it over to Doug Lane of Water Tower Research.

Doug Lane, Head of Consumer Products, Water Tower Research: Thanks, Aaron. Yes. And good morning, everybody. Glad to have Herbalife here. And we’re just gonna do a fireside chat, have a little conversation with John, who’s CFO of the company.

He’s in his second stint as CFO, so he’s very familiar with the company and has a long track record. So, John, I know it’s the forty fifth anniversary of Urban Life. So what is Urban Life today?

John DeSimone, Chief Financial Officer, Herbalife Ltd.: Yeah. Think it’s a good way to start. So we’re a global health and wellness wellness company. We are the largest publicly traded direct seller in the world. We are about 5,000,000,000 in net revenue.

We operate in over 90 countries, and we sell through about little over 2,000,000 distributors globally. According to Euromonitor, we’re the number one protein shake in the world. We have the number one weight management and well-being brand in the world, and we have the number one active and lifestyle nutrition brand in the world. Regarding the protein shakes, we sell about 4,500,000 individual shakes per day. That’s how the math works.

So give you a little bit of the scale of the company on a global basis, and that’s the reason why we’re the number one protein shake in the world. And recently, we were, awarded through US News and World Reports, one of the best companies to work for, in The US. So we’re we’re proud of that. So that’s a nickel to our who we are.

Doug Lane, Head of Consumer Products, Water Tower Research: No. That’s great. That’s a great way to introduce the company. I think one thing and I followed direct selling stocks for a long time. And one thing about Herbalife that was always unique to me is the the nutrition clubs because you have or you distributors started nutrition clubs, I think, in Mexico some twenty odd years ago, and now it’s a global thing.

65,000 or so approximately. I mean, that’s a lot of doors. It’s more than Subway. It’s more than Starbucks. So how do nutrition clubs fit in the equation?

John DeSimone, Chief Financial Officer, Herbalife Ltd.: Yeah. It’s an important question. So and I think it’s something a lot of investors or potential investors don’t know about our belief. So let me talk about what a nutrition club is. A nutrition club is a fixed location, brick and mortar location, owned and operated by a distributor or a group of distributors whose club name isn’t determined by that distributor.

So it’s not an Herbalife owned location. It’s a distributor owned location. Within those locations, there’s lots of different operating models. But the core of the operating model is that a consumer can come in and get what they need for that day. K?

And an analogy I like to to use is think of Starbucks. Right? You can buy a pound of coffee, or with Herbalife, you can buy a container of a shake. Or Starbucks, you can go to a Starbucks location and get a single cup of coffee. And it’s do it for me, and it’s just that day.

And that price point is accessible even though you could buy a pound of coffee for, I don’t know, $10 in the last few months. People are willing to go to Starbucks for that individual cup of coffee. At Herbalife Nutrition Club or a nutrition club, that’s products of are herbalized products. A consumer can go in and just get their nutrition shake or they can get a cup of tea. You walk in.

It’s a menu. You order from the menu, and you get an individual serving of a product. It’s a very sticky model, and it kinda flips direct selling upside down. Direct selling traditionally is characterized by very infrequent interaction between a distributor and their customer. And usually in that interaction, you’re asking for a pretty big sale.

With the nutrition club, it’s a very frequent interaction between a distributor and its customer because the customer’s coming into the club, and you’re only asking for a small transaction. So it’s more of a frequent interaction, small price point with the goal of building a community. So in many of our clubs, the club operator does other physical activities. Some could have a small gym next door. Some could do mommy and me walking classes.

They try to create a community that’s not just based on the product, but also based on some physical activity that helps you achieve nutrition goals, and that creates stickiness between the customer and the distributor. Right? Because a lot of it revolves around weight loss or some sort of physical body change that is objective. So if you lose weight, you know you lost weight. Your friends and family know you lost weight.

And inevitably, somebody else from that circle wants to go to the club and do it. And so the club becomes very social in that respect. In The US, we have 9,500 of these clubs. Again, they’re not named Herbalife on the outside, although on the inside, many are. And about 40% of our sales in The US go to that daily consumption model, that daily price point model in nutrition clubs.

But about two thirds of our sales in The US come from nutrition club owners, meaning they do more than just that individual shake. They’ll also sell take home products or create preferred customers who can then buy from the company. So it’s a very important model for the com for the company. And in The US, all of the transactions get logged into our POS system. So we have a lot of consumer data.

You know, we had over 4,000,000 customers come into the clubs last year, and we know what they bought, how often they bought, what price point they paid. It’s a lot of data we’re not using yet. We’re starting to get into the phase of being able to use that data and use AI to help the distributors sell more, but it’s a huge opportunity for us. So that’s the quick and dirty of

Doug Lane, Head of Consumer Products, Water Tower Research: the No. That that’s important because it’s sort of the opposite of social media selling where, know, you reach a lot of people, but you may never even know who you’re buying from or see them. Whereas with the nutrition club, you see them every day, you know. So it’s a It’s

John Heffernan, Emcee, New York Rangers: a community.

John DeSimone, Chief Financial Officer, Herbalife Ltd.: That’s that’s that’s the important part of it.

Doug Lane, Head of Consumer Products, Water Tower Research: Right. Close and personal. And you mentioned the technology. I know that your insights in the end user are the best they’ve been. And direct selling, typically, you you sell to a distributor, and then distributor builds a business around that.

So the distributor is the interface with the consumer, but now you’ve got much more consumer data. I think a lot of it had to do with the settlement with the US Federal Trade Commission back in 2016. So can you talk a little bit about that settlement and how you use that to move Herbalife forward?

John DeSimone, Chief Financial Officer, Herbalife Ltd.: Yeah. We went through an interesting phase from about 2012 to 2018 between a short seller, another hedge fund owning a good chunk of our company, and some regulatory events. And so in 2016, we reached a settlement with the FTC. And the core of the settlement was that we don’t pay our distributors any commissions, any of their earnings until the products they purchased from us get to an end user, which is very different than how direct selling works in the past. And how direct selling works in every other company, which is when the distributor purchases product, even if it’s to resell, all the commissions get paid up.

K? And there’s some risk in that. So what the FTC wanted us to do was track the inventory even when it gets to a distributor, and only pay out commissions when that distributor resells it, which means we need to create a p we need to create a POS system so we can see that second transaction. So right now, in The US, none of our distributors earn anything until they resell the product, or if their customer buys directly from us, but if they’re a customer who’s not a distributor. So it gave us permission, basically, to get data and customer information from our distributors, which they were hesitant to give us in the past for the fear that we wouldn’t need the distributor anymore.

We’ve proven to them that we’re not going around them, that we’re using this to help benefit them. So we have a lot of customer data that no other company has. Again, we have not been good at using it. That’s where some of the opportunity comes in. But that settlement has given us a lot of information that we wouldn’t have had otherwise.

Doug Lane, Head of Consumer Products, Water Tower Research: And I think what was interesting is after the settlement in The US, the distributors outside The US saw what was going on, and they were like, hey, you know, how do we do this? So it sort of you took a a negative and definitely spit it into a positive where you updated your whole business model globally, not just

John DeSimone, Chief Financial Officer, Herbalife Ltd.: Yeah. Not not with the same FTC, which that’s still strictly The US settlement. But there were some good things that came out of it. And some of those good things, we were able to partially globalize, like preferred customers and things. Right.

Right. Preferred customers are in countries that represent 80% of our sales. Preferred customers didn’t exist before. The preferred customers allows a distributor to sign up their customer with the company, and the distributor gets the economic credit for it, but the customer buys directly from the company. That didn’t exist before that settlement.

Doug Lane, Head of Consumer Products, Water Tower Research: Again, end user information that you can use as a go.

John DeSimone, Chief Financial Officer, Herbalife Ltd.: Yeah. Let’s talk a little

Doug Lane, Head of Consumer Products, Water Tower Research: bit about current events because the pandemic has wreaked havoc on just about any direct to consumer model, not just Herbalife. So talk a little bit about your journey through the pandemic, and where are we today with regards to that?

John DeSimone, Chief Financial Officer, Herbalife Ltd.: Yeah. So during the pandemic pandemic, us and a lot of direct sellers thrived. A lot of people signed up as distributors. A lot of people did the business. A lot of people looked at clubs because clubs were serving food.

Most of our products are considered functional foods, and they were considered essential by the US government. Distributors were allowed to open up clubs and stay open. Even though they couldn’t have the social element there, they could deliver the food, the shakes, and whatnot. Turns out that cohort that drove all that benefit during COVID left when COVID they were they were it was a weak cohort. They we couldn’t have training events.

We had no no in person events. They only knew one way to do business, and they did it because it was available. And then went back to the lives, and it created an air pocket for us. And we had to rebuild our distributor base. And so kind of the second half of twenty twenty two and all of 2023 were were pretty weak.

And we rebuilt in 2024, started growing new distributors in 2024, starting in the first end of the first quarter. Really late March into April, we started rebuilding distributor force, had distributor growth every quarter since, and so that foundation is now much more stable. Sales has stabilized. We haven’t, you know we’re teetering on flattish, but some quarters on a constant currency basis, we’ve had growth now two quarters in a row. Got got a little hurt from the strength of the dollar on the translation side.

But sales are stable to, at least on a constant currency basis, growing.

Doug Lane, Head of Consumer Products, Water Tower Research: Mhmm. And a lot of that had to do with what I thought was a very unusual move in that you took one of your top distributor leaders, these are independent contractors, and brought him into the corporate offices, I think initially as head of strategy, and now he’s the CEO. So how has Stefan influenced the business and and driven some of this growth you see? Yeah.

John DeSimone, Chief Financial Officer, Herbalife Ltd.: Sure. So maybe I’ll step back for a second for context. So prior to COVID, our long term CEO retired. Mhmm. During kind of the end of COVID, I also partially retired.

And there was a new CEO, and things didn’t work out to us. So we’re really unique company in how we sell, and then the amount of commitment and confidence our distributors need to have in management. And so in late twenty twenty three, to help stabilize the business, the prior CEO came back. And then a year ago in March, he brought me back. So I’ve been back a year as CFO.

CFO. But most importantly, our CEO was 70, and he needed a viable successor, which didn’t work out well a prior time. And so when he came back in late twenty twenty three, he brought on board our number two global distributor. A gentleman has businesses in most of our countries who joined as a distributor in 1992, became our number two distributor, did very well for himself. He doesn’t need the the money.

He he he’s really on a on a mission. He’s got a passion for nutrition. And so he joined with the hopes that he could be the successor. He came out as head of strategy, got promoted to president, and now he’s CEO. And he’s a very strategic banker, but he more importantly, he for thirty two years, every day he woke up and said, how do I sell more product?

How do I build an organization that sells more product? And he was incredibly successful at building an organization that sells more product. Because he’s got very disciplined. He’s very strategic. He’s been through a number of shifts in in the globe.

I mean, he joined the Internet. Didn’t exist. Right? So he went from the Internet to social media, you know. So he’s very good at adapting the business to work in any environment.

He came in. He’s the one who put the programs together to drive new distributor growth. And so we’re we’re thrilled to have him. Know, he became CEO in May 1, I think it was. May 1, became CEO.

The prior CEO and chairman stayed as chairman. Right? So the good thing is Stefan gets to focus on the strategy of the business without being distracted with directors role, and that helps Michael and Stefan. Michael’s, who was the prior CEO, is now executive chair. So he’s still an employee, so he’s he’s still, you know, in the company, still mentoring Stefan.

But Stefan’s a great great executive, and we’re lucky to have him.

Doug Lane, Head of Consumer Products, Water Tower Research: Yeah. And also, recently, to your honors in LA in March, you you announced some acquisitions. And, you know, I can’t remember, for the life, announcing a lot of outside acquisitions in its past. So that’s kind of a a departure from from normal trends. So and they’re they’re relatively small.

So what what is the purpose of the acquisitions, and how are they gonna help going forward? Yeah.

John DeSimone, Chief Financial Officer, Herbalife Ltd.: So the the core strength one of the core strengths, if not our biggest asset, is our distributor base. Right? These two plus million distributors who have access to millions of customers, and that platform is incredibly powerful. And we wanna bring the next wave of product ideas to that platform. And this acquisition is we believe will do that.

So this there were three acquisitions. They were all connected. They had some shared ownership. But I’ll talk about two core ones, Protocol and Link Bioscience. Protocol is an app that was in development, hasn’t been launched yet.

We’re launching it to our US some of our US distributors in July and then the rest of The US in October. It’s it’s a health and wellness app. Right? Tracks your water intake, your steps. It’s very interactive.

You you answer a handful of questions. You can get blood tests. You can get DNA tests. A lot of different biomarkers that then we take that information in to Link Bioscience, which is the second company we purchased, who is an operating company, who does something like this for three other companies already. They take that data, and they create a very personalized nutrition product for you based on that data.

So you can picture a manufacturing line with a bunch of different hoppers with different ingredient powders in it. And this this package will come and just grab from the different ingredients and create a product you’ve done. It’ll have your name on it. It’ll come in a daily packet, and it’ll have all the supplement ingredients that your body needs based on your biomarkers, whatever test you decided to take, and whatever questions you you answered. And it’s very personalized for you for what your body needs.

It’s personalized nutrition. There’s different buckets to it. So the big one is this ultra personalized component. There’s also semi custom, where you can just answer questions and say, based on those questions, here are eight inventory products. So not customized, but eight inventory.

You’re a man over 50, and here are your goals. Here’s the product for you. Mhmm. And so it’s it’s it’s going from this set of products that are for set of products that are for the masses to something that’s very personalized, which we believe is the next wave for for nutrition.

Doug Lane, Head of Consumer Products, Water Tower Research: Well, that’s right. I mean, you know, the the the company was founded on weight loss, lose weight now, ask me how. And then Michael Johnson, the previous CEO, really expanded, you know, sports nutrition. Just really made it a a high quality nutrition company, vertically integrated. So what is Stefan gonna do?

Is it a personalized nutrition? Is it just maybe explain the protocol app a little bit more and what that does for your distributors and your customers.

John DeSimone, Chief Financial Officer, Herbalife Ltd.: Yeah. I mean, protocol app creates a technical connection to the customer. Right? That creates an interaction so that customer’s book information is available for you to create a custom program for that for the distributor or the company to create a custom program for that customer. But that interaction creates a community.

And as a distributor, I can set my own goals. I can have a little challenge with with my customers through the app, and that app can track lots of different things. Again, it’s gonna be launched in July. So if you’re interested, come to our Extravaganza. You’ll see you’ll see the app.

So we’re not gonna we’re still finalizing some of the elements of it, but just it’s it’s a it’s a technical community is what it’s gonna create.

Doug Lane, Head of Consumer Products, Water Tower Research: And these acquisitions are mostly IP. Right? I mean, you did have a little operating company, but it’s mostly IP. Yeah.

John DeSimone, Chief Financial Officer, Herbalife Ltd.: But they’re also small. Right? They’re IP. Exactly. We’re we’re our acquisition strategy is to acquire technology or products that are new, innovative, that doesn’t have the distribution yet because we have the distribution.

That’s our strength. Right? We can’t acquire a company who’s already has distribution. We’re not that’s value that we’re not gonna be able to to leverage, but we can acquire somebody who’s got a great idea that just needs distribution. And that’s what these two companies did.

There’s a third company that was in this deal, which is called Pruvit, which is another direct seller. There’s some value in that. That wasn’t core to the deal, but these other two companies were founded to support Pruvit. And so you couldn’t buy the two without the third, but we’re gonna create value out of the zero two. But we’re

Erin Banias, Head of Investor Relations, Herbalife Ltd.: not gonna

John DeSimone, Chief Financial Officer, Herbalife Ltd.: own Pruvit for two more years. Right. You just took their technology. You took their technology. Yeah.

Doug Lane, Head of Consumer Products, Water Tower Research: Talk a little you know, you’ve been CFO now. This is your second step, and so you’ve been involved with capital allocation for Herbalife for a long time. So talk a little bit about your capital allocation strategy and how much is gonna be required for these acquisitions and how much just an internal growth? Just just in general, what’s your outlook on stock buyback, dividends, capital investing?

John DeSimone, Chief Financial Officer, Herbalife Ltd.: So first of all, we’re we generate a lot of cash. Yeah. Even in the lean times coming out of COVID, we generate a lot of cash, and we have negative working capital. So it’s a it’s a great position to be in. In the past, that excess cash didn’t go to acquisitions and likely won’t go acquisitions unless it’s small.

We’re not gonna do a big acquisition. So that excess cash, which is beyond what we could invest appropriately in the company, went back to shareholders and mostly in the form of buyback. We bought back over $6,000,000,000 of stock since I joined the company. Today, we’re using that excess cash to pay down debt. Our leverage ratio when I came back was about 3.9 to one.

We wanted to get it down below three. At the end of first quarter, we’re at 2.97 based on bank EBITDA, so we hit that goal. We want to hit it by the end of twenty twenty five. We hit it by the end of first quarter of twenty twenty five. We’re gonna continue to pay down debt because it’s an expensive debt deal.

Plus, I think, you know, if you look at our enterprise value, a lot of it’s wrapped up in debt. The more debt we can pay off, the more equity value we can just create. Just transferring value from from debt holders to equity holders. So we’re gonna look to use most of our excess cash over the next four years to pay down debt. What I said when I came back last year, my second earnings call is that from that point to the end of twenty eight, we’re gonna pay down a billion dollars, and that’s the goal.

We generate we think, we believe we’re gonna generate more than that in cash. So there is some cash still to either do an acquisition, a small acquisition, or some other form of capital allocation, but we’re gonna look to pay down debt primarily with the use of cash.

Doug Lane, Head of Consumer Products, Water Tower Research: So and your market cap is what? $6,700,000,000? So, I mean, you’re buy back a billion dollars worth of debt assuming the EB to EBITDA stays the same. That that Yeah. That means

John DeSimone, Chief Financial Officer, Herbalife Ltd.: there’s a lot look. I came back because I think there’s a lot of opportunity in stock. Right?

Doug Lane, Head of Consumer Products, Water Tower Research: Right.

John DeSimone, Chief Financial Officer, Herbalife Ltd.: You know, but for what it’s worth, you know, I don’t get paid. I took I don’t get paid salary. I took all of SARs to to come back because I think the stock is undervalued. And that proposition that undervalued proposition or opportunity, I put into four buckets. So one is our margin our margins had really deteriorated coming out of COVID.

And in 2023, our EBITDA margin was 11.3%. I think there’s a lot of room to grow that. We got up to 12.7 in 2024, and we’re at 13.4% last quarter. So there’s a lot so that that’s one avenue to create value. The second is, like you said, our equity is, you know, $700,000,000 right now.

Our equity value, we pay down a billion dollars in debt over the next three and a half years. Even if you don’t think the value of the company changes, it moves a billion dollars of value from debt holders to equity holders. And that’s that’s a that’s a huge opportunity to stock right there. Third is I do believe we’re gonna return to sales growth soon. We stabilize.

I believe that. And that’s an opportunity. And fourth, you know, our enterprise value multiple is, like, four times right now, which is incredibly low. And I think there’s just a lot of misunderstanding of who Some of that is we did it to ourselves, and the industry did it to itself because of how poorly it performed coming out of COVID.

We’re gonna we’re turning that around. Second is, you know, I don’t think the investor community understands nutrition clubs and the opportunity it offers and then protocol. So we have we have we’re gonna have all this consumer data that we can leverage, and most other direct sellers don’t have. And I just think there’s a big opportunity to increase the the enterprise multiple.

John Heffernan, Emcee, New York Rangers: Well, yeah. John and Doug, just as a reminder, if you wanna open it up with five minutes to go, just want to open up to questions. I don’t mean to interrupt you. Okay. Yes.

Sure. We’re we’re counting down here.

John DeSimone, Chief Financial Officer, Herbalife Ltd.: Don’t want to up. Any more questions, or we

Doug Lane, Head of Consumer Products, Water Tower Research: should open up? But but maybe just to sum it up, you know, you you you you’re already given a lot of good reasons. And, you know, just as an analyst, I see new distributor growth growing double digits. That to me, that’s a leading indicator. So it seems like the stage is set.

But maybe in in what’s your elevator pitch for why people should invest

John DeSimone, Chief Financial Officer, Herbalife Ltd.: in Herbalife today? Well, I think the stock is tremendously undive. Think it’s the four reasons I just gave. Yeah. It’s it’s our enterprise multiple is incredibly low.

There’s a huge opportunity there. Our performance is is improving. Margins are improving. New distributor growth is is is improving, and sales are stable. So that and then we generate a lot of cash.

Cash is valid. We got a lot of different ways we can use that.

Doug Lane, Head of Consumer Products, Water Tower Research: Our manager has skin in the game. Between John taking equity and Stephan giving up a very lucrative distributorship to come in as CEO, they have skin in the game. So that’s just my perspective. So

John DeSimone, Chief Financial Officer, Herbalife Ltd.: does anybody have any questions for John? Yeah. He wrote down what the the debt was used for. Ultimately, it was used for buyback, but it but, look, I look at this as as kind of the tail to what we went through in 2012 to 2019. You know, in 2012, we had a short seller come out against the company.

We bought back a lot of stock then. Didn’t didn’t really leverage up much, but we also had a hedge fund buy a lot of the company. We ultimately got, you know, control of the board. And when the short sale failed, that hedge fund that was owned a lot of us wanted us to buy back his stock, and we did. And a lot of that was debt.

Thanks.

Doug Lane, Head of Consumer Products, Water Tower Research: Any We have about a minute left. Do you have a slide showing your products?

John DeSimone, Chief Financial Officer, Herbalife Ltd.: Well, no. But we can send you all all products. We didn’t come with a slideshow. We do a fireside chat. But our products are I mean, mostly functional food.

So we have meal replacement shakes. We have sports products, sports sports shakes. We have tea, a lot of different kinds of tea, energy teas, aloe, nutritional supplements, snack bars, protein chips. We’re very much a protein company. And okay.

How do you plan to implement AI? Sure. Well, that’s a great question. So we’re we’re doing a search for a CTO right now that’s gonna be heavily focused on AI expertise because it’s a huge opportunity for us. So we’re gonna leverage it both for internal efficiency because our tech group is is a very expensive tech group right now.

We spend a lot of money technology, and so we need to be more efficient in that. But I think most importantly is we have a lot of consumer data that AI can leverage to help out the stripper’s cell phone. And that’s how we’re gonna we’re done? Okay. Yeah.

Thank you very much. I the time in the room is

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