You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: 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.
2021 was another record year for Herbalife Nutrition.
Even during this period of continued global uncertainty due to the pandemic, our entrepreneurial direct sales channel helped consumers around the world pursue their nutrition and wellness goals by giving them access to our high-quality nutrition products.
For the full year, demand for our nutrition products resulted in net sales of $5.8 billion, an increase of 5% compared to the prior year and an annual record for the company.
Our three largest regions, Asia Pacific, North America, and EMEA, along with 37 individual markets, set annual net sales records.
Full-year 2021 reported diluted earnings per share of $4.13 and adjusted diluted earnings per share of $4.79 was an increase of 49% and 29%, respectively, compared to the full year 2020.
Full-year 2021 reported net income of $447 million and adjusted EBITDA of $874 million were both annual records for the company.
For the full year, we averaged over 500,000 active sales leaders per month, a record for the company and an increase of 9% compared to 2020.
We brought in 2.9 million new distributors and preferred customers, which was down just 1% compared to 2020 and actually up 31% compared to the more normalized 2019 year.
We continue to broaden our reach and attract new audiences in 2021, with two-thirds of our new distributor and preferred customers identifying as millennials or Gen Z. This younger demographic drives a high level of business activity by engaging with the business in new ways, including innovative nutrition club models and increased utilization of social media and digital tools.
Today, we also announced sales leader retention results for the last 12-month requalification period ending in January of 2022.
This year, a record 68.9% of our sales leaders were retained, up from last year's prior record of 67.9%.
We believe this result reflects the ongoing sustainability of our business and the attractive opportunity that we offer to our distributors.
Turning to the fourth quarter, our net sales of $1.3 billion decreased 7% compared to the fourth quarter of 2020.
The Q4 year-over-year trend was impacted by a challenging comparison period.
On a two-year stack basis, we saw growth of 8% compared to the fourth quarter of 2019.
The Asia Pacific region had another quarter of growth, up 5% compared to the prior year.
The region was led by continued strength in India, which grew 33%.
India is supported by strong underlying metrics, including 35% year-over-year growth in new distributors and in preferred members, as well as a 32% increase in active sales leaders.
We're making investments in India to further support the market with a newly opened 150,000-plus square foot state-of-the-art center in a suburb of Bangalore.
The new facility will allow us to accommodate planned growth in India as we go from the current level of 900 jobs to approximately 1,500 employees over the next five years.
The space will be home to a new local product research and development facility designed to accelerate new product launches.
It will also contain a state-of-the-art quality control lab, a distributor meeting facility, and a global business services center.
Looking at North America, we saw a decline in net sales of 3% in the quarter.
This decline is up against a challenging prior-year comparison period.
However, the two-year stacked growth rate in the region increased by approximately 29% compared to Q4 of 2019.
One area of continued strength in North America is our U.S. nutrition club business.
We ended the year with over 12,000 nutrition club locations, an increase of more than 30% compared to the end of 2020.
We are excited to see our sales force is energized by the return of in-person distributor events across the North America region, which began in October and continued with 36 separate in-person events so far in 2022.
Although several Q4 events were disrupted by the Omicron variant, attendance has been high for these events.
And we believe the interactive discussions, the face-to-face team building, and the social elements that are characteristic of our in-person events are all an important source of ideation, motivation, and inspiration for our distributors.
Additionally, in North America, we're pleased to share that we recently acquired intellectual property that will serve as the basis of our first-ever vegan product line in the region.
It's expected to launch in early 2023.
We believe this line will allow us to reach a brand-new market of savvy vegan consumers who are looking for certified vegan and organic nutrition products and dietary supplements.
EMEA experienced a challenging year-over-year comparison, resulting in a 7% decline.
However, in the region, we actually saw a 9% year-over-year increase in the number of active sales leaders, which reflects the continued strength and the solid foundation of the EMEA business.
Looking at the two-year stack in the region, EMEA grew 21% compared to the fourth quarter of 2019.
Although the combined new distributor and preferred customer numbers are lower than Q4 of 2020, we saw growth of 23% compared to the more normalized 2019 comparison period.
We're in the early stages of a new project in the region designed to rearchitect our distributors' e-retail and ordering platform.
The goal of this initiative is ultimately to completely overhaul and modernize all our current ordering platforms with growth in mind.
And we're currently in the vendor selection phase for this project and expect a new platform will be available for our distributors in the region in 2023.
The softness in our China business continued in Q4 as net sales declined 31% compared to the fourth quarter of 2020.
Pandemic-related disruption contributed to challenges in attracting, training, and retaining new entrants in the market.
We remain confident that our strategic initiatives aimed at enhancing digital capabilities and daily consumption at nutrition clubs is going to end up benefiting our sales performance over time.
In Mexico, sales declined 5% in the quarter following three quarters of growth as the market was adversely impacted by intermittent pandemic-related disruption.
Although our business wasn't directly impacted by any government pandemic-related restrictions, we do believe that a high case number during the quarter impacted attendance at our nutrition clubs.
Beginning this year in Mexico, we initiated a new weekly commission payment system that enables distributors to receive their commissions on a weekly basis instead of a monthly basis.
This is a first-of-its-kind payment system for Herbalife Nutrition, and it's an exciting opportunity for our sales force to receive their earnings more frequently and expedite their cash flow patterns.
We will be analyzing this program's success, including its impact on distributor metrics, and evaluate the possibility of extending it to additional markets in the future.
For the South and Central American region, the fourth quarter declined 14% year over year.
The region was negatively impacted in markets such as Brazil and Colombia, where government restrictions related to COVID-19 persisted throughout the quarter and impacted our nutrition club activity.
More broadly in the region, the pandemic has contributed to macroeconomic challenges, which have impacted consumer spending.
Turning to our 2022 outlook, we're initiating net sales guidance to be in the range of flat to 6% growth for the year.
We expect the progression of year-over-year comparisons in 2022 will shape the cadence of our quarter-to-quarter performance.
We estimate first-quarter net sales to decline in the range of down 10% to down 4%.
However, we anticipate that the decline will improve in the second quarter.
And as previously stated, we expect to return to year-over-year growth in the back half of the year.
Like many other companies, we expect the bottom line in 2022 to be impacted by unique inflationary pressures being felt across many markets.
We are currently observing higher-than-usual cost increases in our supply chain with respect to raw materials, shipping costs, and labor at our manufacturing facilities.
This pressure, as well as cost increases expected due to a return to normalized levels of in-person distributor events and activities, are resulting in expected declines for adjusted earnings per share and adjusted EBITDA versus 2021.
We anticipate, however, that we can partially offset cost increases in our supply chain by executing on our pricing strategy, which is to increase prices in a way that keeps up with local CPI in each of our markets.
In 2022, we don't expect pricing will fully offset all cost increases, which will result in a net headwind to gross profit of approximately 100 basis points for the full year.
Our efforts to improve margins through productivity and efficiency improvements within our business operations are also anticipated to help offset the near-term margin pressure that we face.
One specific opportunity to achieve this is through our transformation program, first referenced on last quarter's call.
This program is a structural realignment of both the front and back office with the goal of ensuring our infrastructure processes and organizations are efficient and scalable to support our business growth.
Once fully executed, we expect the first phase of our transformation program will result in ongoing incremental savings in SG&A of $10 million to $15 million per year.
We're also assessing a second phase of the program, which we're preliminarily planning for 2023, and anticipate that it will result in annualized savings in the same magnitude as Phase 1.
Alex will provide more details on our transformation program, as well as our annual and Q1 guidance in just a moment.
We continue to execute on our long-term growth strategy, including product innovation.
And in 2021, regional product launches contributed to over 400 new SKUs in the company's portfolio.
Approximately 100 of these new SKUs have been part of our fast-growing energy, sports, and fitness category, which continued to lead our core product categories with an increase of 26% for the full year.
Our commitment to product is one of the factors that led us to be recently named by Euromonitor as the no.
1 brand in active and lifestyle nutrition, as well as the world's no.
The success of our company is rooted in the work and the dedication of not only our distributors but also our employees.
And I'm honored that Herbalife Nutrition was selected as one of America's best midsize employers and one of the top 10 employers in our industry in the 2022 Forbes rankings.
Each member of the Herbalife Nutrition team is valued, and their contributions are helping us expand access to good nutrition and economic opportunities all around the world.
I'm confident that these positive impacts will only continue to grow in 2022 and beyond.
As John mentioned, 2021 was a record year for Herbalife Nutrition across a number of metrics.
Net sales, net income, adjusted EBITDA, active sales leaders, and the global retention of sales leaders are a few of the records set in 2021.
However, we exited the fourth quarter with a net sales decrease of 7% compared to the fourth quarter in 2020.
This was in line with our expectations for the quarter as we continue to comp 2020 results that benefited from the surge in demand for our nutrition products.
However, comparing to the fourth quarter of 2019 prior to the pandemic, it represented an 8% increase on a two-year stack.
Currency was a headwind to net sales in the quarter, representing a drag of approximately 110 basis points.
Normalizing for currency, there was sequential improvement in the fourth quarter growth with local currency net sales declining 5.5% versus 7.6% year-over-year decline in the third quarter.
This was driven by sequential improvement in volume growth of 5.7% year-over-year decline in the fourth quarter versus the 8.3% year-over-year decline in the third quarter.
And on a two-year stack basis, local currency net sales grew by 10.3% versus Q4 of 2019.
Reported gross margin for the fourth quarter of 77.5% decreased by approximately 60 basis points compared to the prior year.
The decrease was largely driven by increased costs in our supply chain, as well as unfavorable impact of country mix.
The decreases were partially offset by the impact of price increases.
Fourth-quarter 2021 reported and adjusted SG&A as a percentage of net sales were 38.9% and 37.5%, respectively.
Excluding China member payments, adjusted SG&A as a percentage of net sales was 32.1%, approximately 290 basis points unfavorable compared to the fourth quarter 2020.
During the fourth quarter of 2021, prior to the impact of Omnicron, there was a significant increase in sales events and promotion costs versus the same period in 2020 as we began to return to in-person events.
This increase in nominal spend against lower net sales largely explains the variance in adjusted SG&A ex China member payments for the fourth quarter of 2021.
For the fourth quarter, we reported net income of approximately $38.2 million or $0.37 per diluted share.
Adjusted earnings per share of $0.57 and adjusted EBITDA of $132 million were both within our expectations for the quarter.
Currency was a tailwind of $0.02 in the quarter versus the prior year.
Our adjusted diluted earnings per share and EBITDA figures continue to exclude items we consider to be outside of normal company operations.
This quarter, you will notice, we had a $12.5 million carve-out accrual related to the Rogers lawsuit as the two parties have agreed on principal terms of a settlement.
Now briefly touching on the full year 2021 results, reported net sales of $5.8 billion increased approximately 5% on a reported basis.
Currency was an approximately 190 basis points tailwind for the full year, excluding Venezuela.
2021 reported diluted earnings per share of $4.13 and adjusted diluted earnings per share of $4.79 both benefited by approximately $0.09 per share from foreign currency fluctuation.
On a constant-currency basis, adjusted earnings per share grew approximately 26% compared to full-year 2020.
Our full-year adjusted tax rate of 19.4% improved approximately 330 basis points from our 2020 adjusted tax rate of 22.7%, primarily due to geographic mix of income.
Turning to our guidance for the full year and first quarter 2022.
We expect the current trend of sequential top-line improvement observed in the fourth quarter of 2021 to continue as we progress through 2022.
The first quarter of 2022 top-line comparison is anticipated to be more challenging than the fourth quarter of 2021, given the modest reacceleration in the first quarter of 2021 of the pandemic surge that began in mid-2020.
We expect to return to growth in the second half of 2022, resulting in projected net sales of flat to 6% growth for the full year on a reported basis, which includes an approximate 160-basis-points headwind due to currency.
Our gross profit and adjusted EBITDA margins for 2022 are expected to be pressured from currency, negative manufacturing variances, and the ongoing cost of the shift to home delivery experienced at the onset of the pandemic.
Further, we have seen significant increases in input costs consistent with the news headlines related to raw materials, labor, and freight costs.
To partially offset these margin pressures in the near term, we will continue to leverage our pricing power.
We are also actively engaged in productivity improvement programs for both our front and back-office operations through the transformation program John referenced earlier.
This program involves the realignment of infrastructure to more effectively leverage our global shared service centers, investment in new technologies to increase efficiencies internally, as well as better support distributors and customers, and repositioning of certain strategic functions closer to the regions and markets they serve to better affect local initiatives.
We expect the first phase of this initiative will incur total pre-tax charges in SG&A in the range of $25 million to $30 million.
We carved out approximately $13 million of these charges in 2021, with most remaining expenses to be incurred throughout 2022.
We expect this first phase will result in annual incremental savings in the range of $10 million to $15 million with some savings beginning in 2022 increasing through 2023, with the full impact of the savings expected to begin in 2024.
We are also assessing a second phase of the program to begin in 2023 with expected ongoing annualized savings of the same magnitude as Phase 1.
As a result, for the full year, we are projecting our adjusted diluted earnings per share to be in the range of $4.25 to $4.75.
This includes an approximate $0.17 currency headwind.
We are also providing full-year adjusted EBITDA guidance in the range of $785 million to $845 million, which includes an approximate $21 million headwind due to currency.
Our 2022 guidance includes the assumption of $50 million in share repurchase per quarter, which reflects the minimum buyback amount we anticipate completing on a quarterly basis.
We continue to project reliable cash flow from our business model.
We believe there is value in guiding for a base level of consistent share repurchase while leaving room for potential incremental opportunistic share repurchases to take place over the course of the year.
We have demonstrated this pattern of consistency during 2021 by repurchasing approximately $100 million, $160 million, and $100 million in the second, third and fourth quarter, respectively.
We anticipate this pattern of consistency to continue in 2022.
For the first quarter, we estimate net sales to decline in the range of down 10% to down 4%, which includes an approximate 240-basis-points currency headwind versus the prior year.
We expect the progression of the year-over-year comparisons will lead to a decline in net sales for the first half of the year, followed by growth in the back half.
First-quarter adjusted diluted earnings per share is expected to be in the range of $0.80 to $1, which includes a projected currency headwind of $0.03 compared to the first quarter of 2021.
Adjusted EBITDA is expected to be in the range of $165 million to $185 million.
Turning to cash flow, capital structure, and our share repurchase activity.
Our business continues to generate substantial cash flow.
Operating cash flow of $460 million for full-year 2021 was down from 2020, primarily due to the impact of several unfavorable accounts related to year-over-year net sales declines.
For 2022, we expect this to turn around in the second half of the year when the business returns to growth.
After completing just under $1 billion in share repurchases during the year, at the end of 2021, we had just over $600 million of cash on hand.
As I mentioned earlier, we have included a minimum of $50 million in share repurchases per quarter in our guidance for the year, which will cut into the approximately $1.1 billion remaining on our three-year share repurchase authorization.

user
q4 earnings per share $0.37.
q4 sales fell 6.6 percent to $1.3 billion.
q4 adjusted earnings per share $0.57.
initiating fy 2022 net sales guidance range of 0% - 6% growth.
2022 adjusted diluted earnings per share guidance range of $4.25 - $4.75.
sees q1 adjusted diluted earnings per share $0.80 - $1.00.

assistant