Herbalife Ltd.

Good afternoon, and thank you for joining the second quarter 2021 earnings conference call for Herbalife Nutrition Limited. On today's call is Dr. John Agwanabe, the company's chairman and CEO, John DeSimone, the company's president, Alex A. Mezquete, the company's chief financial officer, and Eric Monroe, the company's senior director of investor relations. I would now like to turn the call over to Eric Monroe to read the company's safe harbor language.

the meaning of the federal securities laws. These statements involve assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those discussed or anticipated. For a complete discussion of risks associated with these forward-looking statements in our business, we encourage you to refer to today's earnings release and our SEC filings, including our most recent quarterly report on Form 10-Q. Our forward-looking statements are based upon information currently available to us. We do not undertake any obligation to update or release any revisions to any forward-looking statement or to report any future events or circumstances or to reflect the occurrence of unanticipated events. In addition, during this call, certain financial performance measures may be discussed that differ from comparable measures contained in our financial statements prepared in accordance with U.S. generally accepted accounting principles referred to by the Securities and Exchange Commission as non-GAAP financial measures. We believe that these non-GAAP financial measures assist management and investors in evaluating our performance and preparing period-to-period results of operations in a more meaningful and consistent manner, as discussed in greater detail in the supplemental schedules to our earnings release. A reconciliation of these non-GAAP measures to the most comparable GAAP financial measures is included in our earnings press release, submitted to the SEC. These reconciliations, together with additional supplemental information, are available at the Investor Relations section of our website, Herbalife.com. Additionally, when management makes reference to volumes during this conference call, they are referring to volume points. I will now turn the call over to our Chairman and CEO, John Aguinobi. Good afternoon, everyone.

Thank you for joining us on the call today. During the second quarter, we delivered worldwide reported net sales of $1.6 billion, growth of 15% compared to the prior year. Net sales grew by double digits for the fourth straight quarter. All three of our core product categories grew double digits. led by the energy, sports, and fitness category, which increased 45% compared to the prior year. All of our regions, except China, experienced net sales growth in the quarter, with four of our six regions increasing by more than 20%. We will discuss China in detail towards the end of my remarks. The underlying fundamentals of our business remain strong. For the third quarter, we are guiding reported net sales to be in the range of down 1% to up 5%. For the full year, we expect net sales growth to be within a range of 8.5% to 12.5% compared to the prior year. In addition to our net sales and EPS guidance, This quarter, we have initiated guidance for adjusted EBITDA. For the full year 2021, we expect to generate between $875 million and $935 million of adjusted EBITDA, which highlights the ongoing profitability and underpins the cash flow generation of our business. Alex will provide detail on our new guidance and why we believe this incremental metric is valuable for investors as they analyze our business. Now, let me get into our Q2 performance in more detail. The North America region grew by 7% in the quarter, primarily driven by continued strong momentum in the U.S., It is important to note that the single-digit growth is up against an extraordinarily high prior year comparison period. However, the two-year stack growth rate of 47% in the U.S. accelerated compared to last quarter's two-year stack. We have seen significant growth in our U.S. Nutrition Club business as many parts of the country returned to more in-person activities. Over the first half of the year, we have had an increase of over 2,000 nutrition club locations in the U.S., with the total club count now exceeding 11,000. While we continue to monitor pandemic conditions, we are currently planning a return to some of our in-person training activities and sales events in the second half of the year, utilizing a hybrid format. The Asia-Pacific region... had another quarter of powerful growth, up 38% compared to the prior year. The region had notable strength in Vietnam, which grew 60%, Malaysia, which was up 45%, Taiwan, which increased 21%, and South Korea, which returned to growth with a 19% increase. Herbalife Nutrition India has emerged as the number one direct selling company in that country, based on a recent market research store report. Our Indian business grew 93% this quarter compared to Q2 of 2020. Recall that in Q2 2020, our business in India was disrupted by the severe public health related restrictions imposed in response to the onset of COVID-19. Over the past year, our business in India has adapted well to ongoing pandemic conditions, implementing several successful digital strategies, including a virtual nutrition club model. Virtual nutrition clubs incorporate many elements of traditional in-person nutrition clubs, but are conducted through virtual platforms such as Zoom or Facebook Live. Virtual clubs establish a sense of community and a personal sense of connection, elements that proved incredibly important during the pandemic. The virtual club strategy is now being shared as a model of success with other regions around the world. The EMEA region set a second straight quarterly net sales record, with year-over-year growth of 22%. Strong performances continued to be seen in markets such as Turkey, which was up 63%, Italy, which grew 38%, Belgium, which was up 25%, and Spain, which increased 21% in the quarter. The United Kingdom delivered 24% growth, which was on top of a challenging comparison of 73% growth experienced in Q2 of 2020. Although combined new distributor and preferred customer numbers are lower than the peak of Q2 2020, we had significant growth of 56% compared to the more normalized 2019 comparison period. We have also seen a 27% year-over-year increase in the number of active supervisors. which reflects the continued strength of the EMEA business over the past 18 months and helped drive the record performance. Mexico grew 23% in the quarter, its first quarter of double-digit growth since 2013. Net sales growth was aided by a currency tailwind in the quarter. Our members in Mexico are beginning to adopt the preferred customer program, which was implemented in March. We'll talk more about preferred customers in a moment. Additionally, the South and Central American region grew 23% in the quarter. The region was led by Chile, which grew over 200%, Bolivia, which was up 58%, Guatemala, which increased 57%, and Peru, which was up 20% compared to the prior year. The region also benefited from the implementation of the preferred customer program. which is now live in eight of that region's markets. Let me go a little deeper on the preferred customer program, which is one of our key strategic elements. Segmentation, which for us means bifurcating our member base into two groups. Distributors, who intend to sell product, and preferred customers, or as they're known in the US, preferred members, who are only product consumers. The preferred customer program is now live in 25 markets around the world. These markets represent approximately 70% of our total net sales. The ability to identify and distinguish preferred customers from distributors provides us with a powerful data set on each group. We believe this primary customer data will be incredibly valuable. We will talk more about our preferred customer program and segmentation in our upcoming Investor Day. We're also seeing more interest in our business from young adults, as approximately two-thirds of new distributors and preferred customers who joined Herbalife Nutrition during the second quarter were millennials or Gen Z. The ability to run their business through digital platforms and to utilize social media to connect with consumers is appealing to this tech-savvy demographic. As we evaluate future product launches, we have Gen Z and their consumer preferences in mind. This demographic is particularly interested in sports nutrition, clean label products, and offerings such as our recently launched hemp cannabinoid product. Now, returning to China. In China, net sales declined 16% compared to the second quarter of 2020. This year-over-year decline for the quarter was below our expectations. We'd like to speak about China in more detail to give you a sense of what we're seeing and, more importantly, what we're doing about it. China represented approximately 11% of global net sales and just under 6% of global volume. in the second quarter. We're intensely focused on two key metrics that have decreased recently in China. One, the number of new service providers joining the business and two, the activity levels of our sales representatives and service providers. We're taking a number of actions in the market to adapt our business and to turn these two metrics around. First, we are continuing to invest in our digital platform. We recognized in 2019 that a powerful digital platform was going to be a crucial component of our efforts for the China market. Since we began our digital transformation, we have formed partnerships with Tencent and Alibaba to help support our efforts. We are just now beginning to see the initial results through the increased usage of our tools. Through the first half of the year, approximately 50% of our business was transacted through our recently launched digital platforms. Second, many of our service providers are shifting their focus to a newer nutrition club model, which includes a smaller scale, more rural location with an increase in daily customer interactions. This type of nutrition club more closely resembles the very successful nutrition club businesses we have in many other parts of the world, such as our U.S. market. Third, with the goal of improving the activity and quality of our service providers in China, we elected to modify our qualification requirements. Historically, in our business, we've found that strategic changes to qualification methods often create short-term disruption. but eventually lead to long-term positive results. Fourth, beginning this month, we believe we've secured the ability to expedite the business licensing processes for our new service providers, where they can obtain their license significantly faster than getting their license on their own. We anticipate this accelerated business licensing timeline will lead to incremental new entrants. Overall, we believe these initiatives will improve the number of new entrants joining the business and create a more active base of service providers in the long term. While below our expectations, China's volume has been more stable sequentially from month to month this year. The China comparisons continue to be difficult for Q3, but they actually get much easier towards the end of 2021 and into early 2022. And we expect China to be additive to the total company growth within the next year. Lastly, let me add that although at its current level, China is a relatively small part of our overall business, We believe it offers significant growth opportunity long-term, and we remain firmly committed to the market. So we've set a date for our Virtual Investor Day, which will take place on September 14th at 8 a.m. Pacific time. We look forward to sharing a deep dive on our company, on our strategy, and on many of the initiatives that we have underway to drive continued growth. I will now turn the call over to Alex to review the financials. Thank you, John.