We normally wouldn’t share April but since the activity started late March, we wanted to share it.
Stephan Gratziani: Yes. And if I can just add also, when we left Lisbon with the 4,300 leaders there, obviously, they were very excited. But we also continued on with a four-weeks training program that happened in April, where we had 140,000 distributors from basically all the markets around the world that participated over four weeks of training. And so really – to the question that was asked earlier, I think it was Hale, it’s the leveling up. It’s the upskilling. When you have 140,000 distributors, and you’ve got a Premier League program that they opted in for, they said, I want to be a part of this, and I want the training, and 140,000 of them were on four weeks of training. That’s where you get really this movement. And so it’s just not talking to 4,300 and they’re excited about the future.
This is big plans. Now as we move into extravaganza season, this talks to also the way that we’re changing things. The value that they saw with Eric, it’s having us even change the way that we’re doing our extravaganza that we’ve done for 44 years. A typical extravaganza we’ll have eight speakers over two days that will each have a section of 40 minutes or 45 minutes. The decision has been made because of the value of the training for the distributors and upskilling them that actually there’s going to be four, five hours of content that Eric is going to be training for all of the participants in extravaganza. So these are not things that are just a promotion. This is not just something to get excited about that’s going to create some movements in numbers over a month.
This is a long-term plan over the next three years to be upskilling and turning our distributors into professional distributors that have the skills necessary to go out and be impactful in their markets. And so long-term program, this is not just a little blip on the radar.
Linda Bolton-Weiser: Great. And then just to speak on the distributor point, like the new people that are being added, the new distributors, can you characterize the demographics? Are they different than historically or similar or like – is there any color you can give on that?
Stephan Gratziani: Yes. I don’t have in front of me the demographics. I would say just as a distributor that’s in 32 years building, I don’t think the demographics have changed. I think whoever distributors have been talking to over the last few years, they’re talking to the same people. It’s their clients that are coming in maybe to a club. It’s their friends that are looking for an opportunity I don’t think that specifically that demographic would have changed. But it’s a good question. And actually, I’m going to look at it because I think it’s valuable. Maybe we bring this on the next call.
Operator: Thank you. [Operator Instructions] Our next question comes from the line of Jeff Van Sinderen with B. Riley. Your line is open.
Jeff Van Sinderen: Great. Thanks. So how should we think about price increases versus volume increases as a driver of your revenue for the remainder of this year? Just wondering how you kind of bake that into your guidance?
John DeSimone: Yes. So I think you’re familiar with our approach to price increases, which is to take – we take them at CPI. And we take them throughout the year, and it depends on the marketplace. So you can see the impact of pricing over volume in our roll forward slide that we put on the screen, and that will be similar to what you see the rest of the year. But I think what you’ll – our expectations are certainly for volumes to be improved in the back half of the year versus the first half of the year and you’ll see a little bit more net sales coming from that.
Jeff Van Sinderen: Okay. When you say improved, do you mean improve sequentially? Or do you mean volumes up I mean second half year?
John DeSimone: I mean, the trend we expect the trend to improve in the second half of the year, which means either up or at least less down.
Jeff Van Sinderen: Okay. Got it. And then I realize you’ve done a lot around the new GLP product line. Maybe you can speak to your latest plans to further evolve the weight management business and the timeframe, I guess, for the next milestones to look for there, kind of amidst the GL drug phenomenon?
Stephan Gratziani: Yes, I can speak to that. We’re really following Jeff, the lead of our distributors on this one. It’s quite interesting, and I don’t want to speak any specific companies, but I think that there’s a couple of companies out there they’re trying to really from the top down dictates in which direction they go in terms of the market, the GLP-1s. We are really listening to our distributors. We want to support them and make sure that we’ve got the products like the product bundle that you’ve just seen. Some of them are very excited and are seeing opportunities. Other of them, it’s just not something that they personally see because of the way or the way that they are doing their business and how they’re going to go out and attract those particular customers that would be on GLP-1.
So we are supporting them. We are also making sure we’re paying attention where we need to pay attention so that when the time comes, if they want more support or if we think that we need to pivot a little bit faster or stronger into something, we’ll be able to do that. But for the time being, we’re not seeing the huge demand that I think some companies are feeling that they are seeing or are reading and that they’re making these big moves. We’re going to make timely moves supporting our distributors, and we feel that’s really the best strategy and the best way forward for us. So not denying there’s a market for it and not – and totally watching where that market is going and being prepared, but respecting and working with our distributors to make sure that we are doing the right thing.
Jeff Van Sinderen: Okay. Thanks for taking my questions. I’ll take the rest offline.
Operator: Thank you. [Operator Instructions] Our next question comes from the line of Karru Martinson with Jefferies. Your line is open.
Stephan Gratziani: Oh, they put Jefferies behind us.
Karru Martinson: Good afternoon. Just to clarify here, you said that much of the $262 million of the stub piece will be paid off with cash flow, two-thirds of that was free cash flow in 2024. So that would imply kind of a $173 million or so would be paid off with cash flow that is generated in 2024, correct?
John DeSimone: Yes. But let me just make sure I’m clear. So your math is right. What we’re saying is we’re going to pay off the whole $262 million from cash flows generated from the business between now and when it’s due in the third quarter of 2025. Two-thirds of that is actually inherent in our guidance for this year, which is you did the math. And that means we’d have to generate one-third from cash flows next year in the first three quarters to be able to pay it off without anything else happening. Now we have – there’s also – where we’ve got our administrative building that’s up for sale because we don’t need the space with the reductions that we’re taking. So that’s some cushion, that’s not in the number. There’s obviously tons of availability on the revolver. So there’s a lot of cushion in order to pay it off, but I wanted to at least give visibility to investors on how we think we’re going to pay it off with cash flows from operations.
Karru Martinson: All right then. Thank you very much guys. Appreciate it.
Operator: Thank you. Ladies and gentlemen, I’m showing no further questions in the queue. I would now like to turn the call back over to Michael for closing remarks.
Michael Johnson: Thank you very much, and thanks, everybody, for being on the call. I think you’re seeing a new Herbalife emerge here today. And the really wonderful thing. I’m stealing two lines from Stephan’s presentation, with experienced year-over-year growth in the distributor numbers in April across all regions. The last time this occurred was almost four years ago in 2020. And that everything we do daily as our distributors in mind and focused on helping them attract and retain more customers, distributors in building bigger businesses. Those are two key elements to where we are today and where we’re going. We’re bringing more people into the company. We are making sure in bringing Stephan in and building this team with John and Edi in North America and Rob, the team that’s been built around the world to now focus 100% our effort and energy on doing things, whether it’s digital, whether it’s product, whether it is training, whether it’s bringing in Eric Worre to join us on our mission here it is distributor focused to help them build their business, help them build a better customer base with products that respond to the marketplace and the needs to work on transformation of customers and consumers to help them along their healthy and wellness lifestyle activities and their journey that they’re there.
And this is what makes us very unique. 67,000 Nutrition Clubs. It sets us apart. And Stephan mentioned a couple of companies that have jumped head over heels into the GLP world. We’re looking at that very carefully. We negotiated with a lot of people, talk to a lot of folks about the potential of GLP-1 in this company. And so the best way for us to do this is do it organically, let our distributors come back to us with a plan with an opportunity in the marketplace, make sure our products respond, make sure our business activity responds to it. But also the things that we’re doing in these clubs that differentiate us is not only transactional, Stephan mentioned, in terms of people coming in, grabbing a shake and going out the door but also people coming in to work on transformation in their lives.
How do I lose weight? How do I get healthier? What activity can I take? What community can I be a part of? This is what makes our company so different, so unique, sets us apart from other folks in our sector. We have a real understanding of some of the challenges in the direct sales industry with some of our competitors but we know we’re different. We have an incredible management team here. We have the incredible opportunity with Stephan on board, with John back with me to make sure that what we’re doing inside this company is focused every single day on topline, building the business stronger, more recruiting, more selling, more opportunity, bottom line efficiency, laser-focused on costs, making sure that our digital platform is laid out in a fiduciary sense and making sure that we are delivering tools and opportunity to people.
This is a special, special company. Very, very unique. I’m here because of my passion for Herbalife, my belief in what we do. Our concern for our opportunity has never been greater. I’m not concerned, but what should I say, the opportunity for our opportunities never ever been stronger than I’ve seen it. We’re going to go up. We’re going to build this business stronger and better. I’m more confident than I have been in a long time. I’ve been back a little over 1.5 years and the excitement just keeps building inside Herbalife. So thanks for being on the call. We’re going to have more good news for you in three months. So stay tuned, and let’s go Herbalife.
Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.
