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.
This year, a record 68.9% of our sales leaders were retained, up from last year's prior record of 67.9%.
Turning to the fourth quarter, our net sales of $1.3 billion decreased 7% compared to the fourth quarter of 2020.
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.
Looking at North America, we saw a decline in net sales of 3% in the quarter.
However, the two-year stacked growth rate in the region increased by approximately 29% compared to Q4 of 2019.
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.
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.
The softness in our China business continued in Q4 as net sales declined 31% compared to the fourth quarter of 2020.
In Mexico, sales declined 5% in the quarter following three quarters of growth as the market was adversely impacted by intermittent pandemic-related disruption.
For the South and Central American region, the fourth quarter declined 14% year over year.
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 estimate first-quarter net sales to decline in the range of down 10% to down 4%.
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.
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.
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.
1 brand in active and lifestyle nutrition, as well as the world's no.
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.
However, we exited the fourth quarter with a net sales decrease of 7% compared to the fourth quarter in 2020.
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.
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.
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.
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.
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.
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 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.
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.
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.
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.
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.

Summary:
Turning to the fourth quarter, our net sales of $1.3 billion decreased 7% compared to the fourth quarter of 2020.
Turning to our 2022 outlook, we're initiating net sales guidance to be in the range of flat to 6% growth for the year.
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.
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.
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.