HERBALIFE LTD. (HLF): Results of Operations and Financial Condition
HERBALIFE LTD. (HLF) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 CONFIDENTIAL & PRIVILEGED Herbalife Reports Second Quarter Net Sales Growth; Marks Fourth Consecutive Quarter of Topline Expansion; Net Sales and Adjusted EBITDA 1 Exceed Guidance Excluding FX Headwinds 2 Advances Personalized Nutrition with Bioniq launch; CFO John D
How this was made
The 30-second read
Why it matters
Traders can update valuation and positioning based on the revised full-year guidance ranges and the explicit FX headwind framing, while also monitoring execution risk around new product launches and platform diagnostics integration.
Market read
Fresh Q2 print and revised FY 2026 guidance (net sales and adjusted EBITDA range tightened) provide a direct expectation reset for HLF.
What to watch
Non-GAAP metrics (adjusted EBITDA, adjusted net income) and the magnitude of inventory write-downs and other costs could be scrutinized for sustainability, especially alongside the CFO transition.
Herbalife Reports Second Quarter Net Sales Growth; Marks Fourth Consecutive Quarter of Topline Expansion; Net Sales and Adjusted EBITDA Exceed Guidance Excluding FX Headwinds
Net sales grew 5.4% year-over-year and adjusted EBITDA reached the upper end of guidance, but adjusted EBITDA margin declined 120 basis points, GAAP results included a $(26.3) million net loss following a $94.6 million loss on extinguishment of debt, and reported full-year adjusted EBITDA guidance was reduced to $670 million to $690 million from $675 million to $705 million.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $ 1,326.8 million | – | 5.4 % |
| Net sales, constant currencynon-GAAP | 5.8% year-over-year | – | 5.8% |
| Cost of salesGAAP | $ 296.3 million | – | – |
| Gross profitGAAP | $ 1,030.5 million | – | – |
| Gross profit marginGAAP | 77.7% | – | – |
| Selling expensesGAAP | $ 466.0 million | – | – |
| General and administrative expensesGAAP | $ 436.2 million | – | – |
| Operating incomeGAAP | $ 128.3 million | – | – |
| Interest expense, netGAAP | $ 37.4 million | – | – |
| Loss on extinguishment of debtGAAP | $ 94.6 million | – | – |
| Net loss attributable to HerbalifeGAAP | $ (26.3) million | – | – |
| Net loss marginGAAP | -2.0 % | – | – |
| Diluted loss per share attributable to HerbalifeGAAP | $ (0.25) | – | – |
| Adjusted net incomenon-GAAP | $ 53.3 million | – | – |
| Adjusted diluted earnings per sharenon-GAAP | $ 0.51 | – | – |
| Adjusted EBITDAnon-GAAP | $ 166.6 million | – | – |
| Adjusted EBITDA marginnon-GAAP | 12.6 % | – | down 120 basis points versus the second quarter of 2025 |
| Adjusted EBITDA, constant currencynon-GAAP | $ 174.4 million | – | – |
| Credit Agreement EBITDAnon-GAAP | $ 190.7 million | – | – |
| Net cash provided by operating activitiesGAAP | $ 32.9 million | – | – |
| Capital expendituresother | $ 11.3 million | – | – |
| Six-month net salesGAAP | $ 2,644.0 million | – | 6.6 % |
| Six-month net income attributable to HerbalifeGAAP | $ 35.6 million | – | – |
| Six-month adjusted net incomenon-GAAP | $ 122.3 million | – | – |
| Six-month adjusted EBITDAnon-GAAP | $ 342.3 million | – | – |
| Six-month net cash provided by operating activitiesGAAP | $ 146.7 million | – | – |
| Six-month capital expendituresother | $ 22.2 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| North AmericaNet sales were up slightly; excluding FX growth was 0.2 %. | $ 273.0 million | – | 0.2 % |
| Latin AmericaExcluding FX, net sales growth was 8.2 %. | $ 245.0 million | – | 16.6 % |
| EMEAExcluding FX, net sales declined (5.6 )%. | $ 277.8 million | – | (3.5 )% |
| Asia PacificExcluding FX, net sales growth was 23.1 %. | $ 470.6 million | – | 15.2 % |
| ChinaExcluding FX, net sales declined (29.0 )%. | $ 60.4 million | – | (24.5 )% |
| WorldwideExcluding FX, net sales growth was 5.8 %. | $ 1,326.8 million | – | 5.4 % |
Third Quarter 2026 and Full-Year 2026 outlook
- RevenueThird Quarter 2026 reported net sales: +0.5% to +4.5% YoY; constant currency net sales: +1.5% to +5.5% YoY. Full-Year 2026 revised reported net sales: +2.5% to +5.5% YoY; constant currency net sales: +2.5% to +5.5% YoY.
- Tax rateFull-Year 2026 adjusted effective tax rate of approximately 35%.
- NoteThird Quarter 2026 adjusted EBITDA: $160 million – $180 million; constant currency adjusted EBITDA: $165 million – $185 million.
- NoteThird Quarter 2026 CapEx: $15 million – $25 million.
- NoteFull-Year 2026 revised adjusted EBITDA: $670 million – $690 million; constant currency adjusted EBITDA: $690 million – $710 million.
- NoteFull-Year 2026 CapEx: $50 million – $70 million.
- NoteFull-Year 2026 capitalized SaaS implementation costs: $35 million to $55 million, which are not included in capital expenditures.
- NoteFull-Year 2026 depreciation and amortization, and amortization of SaaS implementation costs: $140 million to $150 million.
- NoteNet sales and adjusted EBITDA use the average daily exchange rates for the first two weeks of July 2026 to translate local currency projections.
Capital returns
- Share repurchases of $10.0 million for the six months ended June 30, 2026.
What drove it
- Fourth consecutive quarter of year-over-year net sales growth on both a reported and constant currency basis.
- Latin America and Asia Pacific reported double-digit net-sales growth, while North America net sales were up slightly.
- Bioniq GO launched across eleven European markets in June and North America in July, with automatic monthly deliveries available in newly-launched European markets.
- The Company launched Helio and Activate Energy under the Life I/O healthy lifespan brand.
- The North America Pro2col™ extended beta introduced a new user experience, enhanced features, and blood-test diagnostic integration.
- Pricing benefits of 64 basis points partially offset gross-margin pressure from sales mix, other costs, inventory write-downs, and self-manufacturing and sourcing costs.
- Interest expense, net was $ 37.4 million, compared to $ 53.6 million in the prior-year period.
Concerns
- China net sales were $ 60.4 million, down (24.5 )% year-over-year, and declined (29.0 )% excluding FX.
- EMEA net sales were $ 277.8 million, down (3.5 )% year-over-year, and declined (5.6 )% excluding FX.
- Gross profit margin was 77.7%, compared to 78.0% in the prior-year period.
- Adjusted EBITDA margin was 12.6%, down 120 basis points versus the second quarter of 2025.
- The $94.6 million loss on extinguishment of debt resulted in net loss attributable to Herbalife of $ (26.3) million.
- Reported full-year adjusted EBITDA guidance was reduced to $670 million to $690 million from $675 million to $705 million, primarily reflecting FX headwinds.
- John DeSimone will retire effective December 31, 2026.
What to watch
- Third-quarter reported net sales guidance of +0.5% to +4.5% YoY and constant currency net sales guidance of +1.5% to +5.5% YoY.
- Third-quarter adjusted EBITDA guidance of $160 million – $180 million and constant currency adjusted EBITDA guidance of $165 million – $185 million.
- The impact of FX on reported back-half results, following the strengthening of the U.S. dollar.
- The performance of China and EMEA, where second-quarter reported net sales declined.
- Gross-margin effects from sales mix, other costs, inventory write-downs, self-manufacturing and sourcing, and pricing.
- Execution of Bioniq GO, Pro2col™ and at-home blood biomarker diagnostics initiatives.
- Scott Schaefer's succession as CFO effective January 1, 2027.
Balance sheet and cash flow
- Cash and cash equivalents were $ 370.5 million as of June 30, 2026, compared to $ 353.1 million as of December 31, 2025.
- Credit Agreement total debt was $ 2,039.6 million as of June 30, 2026, compared to $ 2,050.0 million as of December 31, 2025.
- Net debt was $ 1,669.1 million as of June 30, 2026, compared to $ 1,696.9 million as of December 31, 2025.
- Credit Agreement total leverage ratio was 2.7x as of June 30, 2026, compared to 2.8x as of December 31, 2025.
- Net leverage ratio was 2.2x as of June 30, 2026, compared to 2.3x as of December 31, 2025.
- Long-term debt, net of current portion, was $ 2,003.7 million as of June 30, 2026, compared to $ 1,971.7 million as of December 31, 2025.
- Net cash provided by operating activities was $ 146.7 million for the six months ended June 30, 2026, compared to $ 96.2 million for the six months ended June 30, 2025.
- Net cash used in investing activities was $ (32.8) million for the six months ended June 30, 2026, compared to $ (69.4) million for the six months ended June 30, 2025.
- Net cash used in financing activities was $ (80.7) million for the six months ended June 30, 2026, compared to $ (132.4) million for the six months ended June 30, 2025.
Analysis
Herbalife reported second-quarter net sales of $1.3 billion, up 5.4% year-over-year, or 5.8% on a constant currency basis. This marked its fourth consecutive quarter of reported and constant-currency year-over-year sales growth. Asia Pacific and Latin America were the principal regional growth contributors, with reported growth of 15.2% and 16.6%, respectively. North America was essentially flat at 0.2% growth, while EMEA and China declined on both reported and constant-currency bases.
Profitability was pressured despite the sales growth. Gross profit margin was 77.7%, compared with 78.0% in the prior-year period. Management cited approximately 47 basis points of sales mix pressure, 22 basis points of higher other costs, 20 basis points from higher inventory write-downs and 9 basis points from self-manufacturing and sourcing costs, partially offset by 64 basis points of pricing benefits. Adjusted EBITDA was $166.6 million and adjusted EBITDA margin was 12.6%, down 120 basis points versus the second quarter of 2025.
GAAP earnings were affected by refinancing-related costs. Herbalife recorded a $94.6 million loss on extinguishment of debt related to the 2024 Credit Facility and the 2029 Secured Notes, producing net loss attributable to Herbalife of $ (26.3) million and diluted loss per share of $ (0.25). Excluding specified adjustments, adjusted net income was $53.3 million and adjusted diluted EPS was $0.51. Operating cash flow was $32.9 million in the quarter and $146.7 million in the first six months. The company repurchased $10.0 million of shares in the first half, while net debt was $1,669.1 million at June 30, 2026.
The outlook retains reported sales growth for the remainder of the year but reflects a greater foreign-exchange burden. Third-quarter reported net sales growth is guided at +0.5% to +4.5% year-over-year, versus +1.5% to +5.5% on a constant currency basis. Full-year reported net-sales guidance was tightened to +2.5% to +5.5%, while constant-currency net-sales guidance was raised to +2.5% to +5.5%. Full-year reported adjusted EBITDA guidance was lowered to $670 million to $690 million from $675 million to $705 million, primarily reflecting FX headwinds, although constant-currency adjusted EBITDA guidance was increased to $690 million to $710 million.
Strategically, the company is expanding personalized nutrition through Bioniq GO, updates to the Pro2col™ platform and a limited beta of at-home blood biomarker diagnostics. The launches of Helio and Activate Energy broaden the Life I/O healthy lifespan offering. Investors will also monitor execution during the CFO transition: Scott Schaefer will succeed John DeSimone effective January 1, 2027, after DeSimone's retirement effective December 31, 2026.
Management, verbatim
Our net sales and EBITDA results for the second quarter were at the high end of previously issued guidance. While the recent strengthening of the U.S. dollar has resulted in additional foreign exchange headwinds affecting our reported outlook for the back half of the year, our constant currency outlook remains consistent with the expectations we shared last quarter.
John DeSimone, Chief Financial Officer
We delivered a fourth consecutive quarter of year-over-year net sales growth, and we continue to expect net sales growth for the remainder of the year. This momentum reflects the resilience of Herbalife and has us poised to successfully carry out our long-term growth strategy. John DeSimone played an impactful role in laying this foundation, and I am grateful to him for his leadership and partnership. I am confident Scott Schaefer’s financial expertise and strategic perspective will help propel us in our next chapter.
Stephan Gratziani
Not in the filing
stated, not guessed- Free cash flow was not reported.
- Dividend amount and dividend declaration were not reported.
- GAAP effective tax rate was not reported.
- Third-quarter and full-year gross-margin guidance were not reported.
- Third-quarter and full-year operating-expense guidance were not reported.
- A separate previous-release outlook was not provided; therefore, no actual-versus-prior-guidance comparison is included.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
The 8-K includes Exhibit 99.1 with Q2 2026 results, product and platform updates (Bioniq GO, Pro2col beta, at-home diagnostics beta), and a planned CFO transition effective Jan 1, 2027.
Ticker impact
Herbalife reports Q2 net sales $1.3B (+5.4% YoY) and raises/adjusts full-year 2026 guidance, tightening adjusted EBITDA to $670M-$690M.
Moderate positive bias for the next session, with follow-through risk if investors focus on FX-driven back-half weakness or margin compression.
The filing is a fresh 8-K with quantified results and revised full-year ranges, which typically moves expectations. However, the article emphasizes FX headwinds and margin down 120 bps, limiting upside conviction.
Market effects
Adds datapoint on consumer health/personalized nutrition demand and margin sensitivity to FX for direct-selling/health supplement peers.
Highlights North America and EMEA expansion via events and Bioniq GO rollout, which may influence regional distributor sentiment.
FX-driven guidance language underscores currency sensitivity for multinational consumer brands, relevant for cross-border peers.
Counterpoint
Investors may discount the constant-currency strength and focus on reported net loss, gross margin down, and FX headwinds that still pressure the back half.
Key entities
- issuerHerbalife Ltd.
Reports Q2 2026 results and revises full-year 2026 guidance; announces CFO transition and product/platform initiatives.
- executiveJohn DeSimone
CFO at time of filing, quoted on results; planned retirement at year-end.
- executiveScott Schaefer
Named successor CFO, effective Jan 1, 2027.
