Herbalife(HLF)2025-04-30 20:40Financial Performance - Q1 2025 net sales were $1.2 billion, down 3.4% year-over-year, but up 1.4% on a constant currency basis[6] - Net sales for Q1 2025 were $1,221.7 million, a decrease of 3.2% compared to $1,264.3 million in Q1 2024[37] - Gross profit for Q1 2025 was $956.5 million, down from $979.3 million in Q1 2024, reflecting a gross margin of 78.3%[37] - Operating income increased to $122.8 million in Q1 2025, compared to $71.9 million in Q1 2024, representing a significant improvement[37] - Net income for Q1 2025 was $50.4 million, compared to $24.3 million in Q1 2024, resulting in diluted earnings per share of $0.49[37] - The company's net income for the three months ended March 31, 2025, was $50.4 million, compared to $24.3 million in the same period of 2024, representing a 107.4% increase[47] - Adjusted net income for the same period was $59.9 million, up from $49.3 million, reflecting a 21.3% increase year-over-year[47] - Diluted earnings per share increased to $0.49 in Q1 2025 from $0.24 in Q1 2024, marking a 104.2% rise[47] - Adjusted diluted earnings per share rose to $0.59, compared to $0.49 in the prior year, indicating a 20.4% increase[47] - Adjusted EBITDA for Q1 2025 was $164.9 million, exceeding guidance, with an adjusted EBITDA margin of 13.5%, up 260 basis points from Q1 2024[9] - Adjusted EBITDA for the trailing twelve months (TTM) was $661.4 million, compared to $634.8 million in the previous TTM, reflecting a 4.2% increase[50] - The adjusted EBITDA margin for Q1 2025 was 13.5%, compared to 12.7% in Q1 2024, showing an increase of 0.8 percentage points[50] Acquisitions and Investments - The company completed acquisitions of Pro2col Health LLC and Pruvit Ventures, Inc., and formed a 51% ownership interest in HBL Link Bioscience LLC[6] - Total cash consideration for the recent asset acquisitions was $25.5 million, with additional contingent payments possible based on future performance[21] - Capital expenditures for Q1 2025 were $18.3 million, with total capitalized SaaS implementation costs expected to be $25 million to $30 million for the full year[10] - The company plans to launch a beta version of the Pro2col technology platform at the Herbalife North America Extravaganza in July 2025, with a commercial release planned for Q4 2025[18] Market and Operational Insights - The number of new distributors joining Herbalife increased by 16% year-over-year, marking the fourth consecutive quarter of growth[12] - The company is focused on executing growth initiatives and restructuring efforts to enhance market penetration[32] - Future outlook includes addressing risks related to global economic conditions, competitive pressures, and regulatory compliance[32] - The company continues to focus on international operations, which significantly impact net sales due to currency fluctuations[46] Balance Sheet and Cash Flow - Total assets decreased to $2,684.3 million as of March 31, 2025, from $2,728.1 million at the end of 2024[39] - Current liabilities decreased to $1,129.0 million as of March 31, 2025, compared to $1,230.4 million at the end of 2024[39] - Cash and cash equivalents at the end of Q1 2025 were $351.0 million, down from $412.5 million at the end of Q1 2024[41] - The company reported a net cash provided by operating activities of $0.2 million for Q1 2025, a significant decline from $13.8 million in Q1 2024[41] - The total debt as of March 31, 2025, was $2,262.5 million, with a total leverage ratio of 3.0x[50] Profitability Metrics - The gross profit margin improved to 78.3% in Q1 2025, benefiting from pricing and favorable input costs[8] - The company's net income margin improved to 4.1% in Q1 2025 from 1.9% in Q1 2024[50]