Alex Amezquita: On consumer sentiment rather than my opinion on consumer sentiment rather than my opinion on consumer sentiment. What I could say is region to region, we have different markets in their evolution post pandemic. A lot of the activities that Stephan just mentioned and how they’re taking hold in each relative markets. We’re seeing net sales growth in three of our five regions. We’re anticipating as a company to see net sales growth in the fourth quarter. So I’d say overall, we’re trending to a positive level with engagement. Obviously, with that engagement is, consumers that are willing see the value proposition that Herbalife nutrition that Herbalife has to help people with their nutrition, to help them with their healthy active lifestyle, to help them in all the ways in changing lives. So we’re really excited about where we’re heading.
Unidentified Analyst: Thank you. I’ll pass it along.
Operator: Thank you. One moment for our next question. And that will come from the line of Karru Martinson with Jefferies. Your line is open.
Karru Martinson: Good afternoon. In regards to the major extravaganza events that you held last quarter and this quarter, could you talk to us of what you guys see whether it be actual sales numbers that you see a lift from these events And how does that sustain itself as we go forward? Because you’re just trying to think about, you know, what drives us to that growth in the fourth quarter, what turns around North America? It does seem that we’re very focused on these in person events, but just trying to get a quantification of what does that do to the bottom line?
Michael O. Johnson: So I’m going to start. This is Michael and I’m going to let Alex and Stephan jump in if they want. So these distributor events are re-emergence of Herbalife right now. During the pandemic and I hate to keep referring to something that’s now a year out, but we were shut down on these events and getting people, as you know, and you’ve heard us say person to person to share ideas to get motivated and inspired to see business methods that may be useful for their businesses and a chance to meet and work with new distributors as well as their up lines, all valuable parts of an extravaganza. The sales lift we’re seeing, it’s so we launched the vegan product in San Antonio and we sold out of this product. So it’s fantastic sales lift.
We’ve got a challenge with supply chain, obviously, to keep us in stock and in supply of that, and they’re doing a fantastic job. So we’re seeing lift there. We’re seeing lift of new customers and seeing lift of new distributors are coming to the company because of a new product offering. The momentum that we’re starting to see into the fourth quarter, I’m going to let Alex address some of the fundamentals of that and Stephan if he wants to jump in. The momentum that we’re seeing in the marketplace goes to what Stephan said about more people engaged in transformational style of operations in terms of the distributorship. People coming and getting healthier, people coming for a workout, people coming to do what we do best is create community around our product.
It’s something that we believe will have a unique advantage of in the marketplace through our nutrition clubs, through our distributors’ activity, through redo transformations and other types of healthy active lifestyle outings we’re seeing through certain states in North America and we’re seeing a take hold on a global basis. These are the things that all spring from an extravaganza. And they spring from that idea sharing and they spring from us getting back to this community effort around healthy active lifestyle. So, Alex, I’ll turn it over to you.
Alex Amezquita: Yes. Thanks, Michael. So I think, Karru, the question was then how does that then translate into numbers? And so whenever we’ve talked about sort of the financial model or the financial profile of Herbalife, if you end that net sales, the next step before that is to see growth, interactive sales leaders, before that is to see growth in your customers, your preferred customers, and new folks coming into the organization. As we’re seeing these events happening, we’re seeing all of the trends that ladder up to that net sales growth out into the future. So we know it’s coming. The trajectory and the slope of that trajectory is a little bit difficult to forecast right now, but we know it’s moving in a direction that suggests net sales growth in the fourth quarter And then we’ll see how that translates into 2024 when we meet with you again, in February.
Karru Martinson: Thank you very much, guys. I’m sorry. Go ahead.
Alex Amezquita: Yes. No, I was just going to add that there’s two components to this. So as Michael said, 125,000 people around the world in the events there’s an aspect of inspiration and motivation and validation when people are all together seeing what’s happening within their markets and either other markets. And they’re seeing the models that people are going to market with. And so there’s the aspect of yes, being in the room, but then there’s the lag of them going back to their homes, their cities and starting to implement a lot of the different models. And so when we look at the regions, really what you see is you see different levels of implementation of models. That are having a level of effectiveness in the marketplace.
And so I think if you look at India, they did an amazing job through the pandemic and the transition and figuring their models out. If you look at a region like EMEA, it’s also showing signs of distributors figuring out the models in the marketplace that are the most effective. And so this is the situation. It will take a little bit of time because people are some of the models are new. The ‘We Do Challenge’ that we mentioned, for some, it’s only been a month that they’ve been working with it. For others, it’s been a couple of months. And so there’s always this kind of lag to when it translates exactly into numbers. But again, what we’re seeing based on the activities, based on the participation, by the way, not just at extravaganza, it’s all of the other events that are taking place.
Some of them very specific to DMOs, which is really that level of support at the DMO and the B2C level that we’re talking about. So Again a little bit of a lag, I can imagine that by the next quarter, we’ll have more to share.
Karru Martinson: Thank you very much guys. Appreciate it.
Operator: Thank you. One moment for our next question. And that will come from the line of Hale Holden with Barclays. Your line is open.
Unidentified Analyst: Hi, this is Marianne on for Hale. Thanks for taking our question. You’ve discussed your focus on the US market given its recent underperformance. Could you provide some clarity around what is driving that underperformance and maybe any changes in consumer behavior that are negatively impacting results there?
Alex Amezquita: So I think we’ve kind of hit that, on this call. I think generally, different markets have been coming out of the pandemic in different ways. The US is no different. The US is behaving in a way a little bit different than other markets. But the answer and the solution is the same. It’s engagement. It’s getting back to healthy active lifestyle. It’s making customers understand the value proposition that Herbalife has. It’s the engagement that we’re seeing at extravaganzas and how that trickles through to, to further effectively show them the value proposition of Herbalife. So that’s all happening. Yes, the slope has been, in other words, the recovery has a little bit slower than we would have hoped. But nonetheless, the trends are moving in the right direction and we’re encouraged that, that we will be back to growth in the future.
